The economy is unpredictable and the demand for certain products and services fluctuate depending on a wide variety of reasons. That’s why it’s important to stay on top of business finances, especially in the early stages of company development in order to avoid bad debt. Bad debt is money you are unable to recover — for example, a client not paying you for the work you’ve done. Bad debt can quickly add up and slowly chip away at your company’s financial security. With that in mind, Integrity Factoring is an invoice factoring company that would like to provide you with the following signs that may indicate your trucking business may have bad debt.
It’s one thing for you to get the voicemail of a client once in a while. However, if it seems like they are avoiding you left and right, this could be a red flag. If a client had the funds or a plan to pay you, they would speak to you directly to avoid any potential misunderstandings. Not to mention, putting a stop to all your annoying phone calls. While we all know that the owner of a business can get busy, if you just can’t get a response, it may be time to send their account to collections. Furthermore, if the financial situation is urgent, you may want to consider working with an invoice factoring company like Integrity Factoring who specializes in advancing your company the money and working with your client to collect payment.
Owning a trucking company requires flexibility. While you can be a bit forgiving if a client forgets to pay or is a few days late, this may be a red flag of bad debt if it keeps happening again and again. While you may think you’re helping a client out by extending the time for them to pay, you could be putting your own business at risk if it’s a frequent problem. Remember, you need to keep your business afloat and pay yourself. In order to maintain credibility and minimize the time between invoicing and collection, it’s important to be firm on your payment terms. If a client is consistently missing payment deadlines, it might be best to send them to collections and stop working with them.
CHANGE OF OWNERSHIP
Last, but not least, a change of ownership for a corporate client is another red flag of bad debt. If a corporate client undergoes a major change in ownership, they may not have the full history of that company’s past debt. Even worse, if they do, they may not feel any obligation to honor it. Instead of waiting to see if they are going to pay, you may want to send them to collections or hire an invoice factoring company like Integrity Factoring to collect payment while providing you with the funds you need in the process.
INVOICE FACTORING WITH INTEGRITY FACTORING
While dealing with bad debt isn’t easy, you should always understand that there are options out there to help. Invoice factoring is designed to provide trucking companies with fast cash flow for your business. For more information about the invoice factoring services we provide, contact Integrity Factoring by filling out our online form or call us at 1.866.834.7338 today.
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