Better Payment Terms For TransportPosted April 19, 2017
Small businesses dominate the transport sector. For those businesses, cash is king. TNX offers a radical solution to help carriers with their cash flow: Pay 7 days after the job – irrespective of the customer, the job, the time of the month. Fast payments, less hassle, and full certainty.
The Road Transport Forum recently published a comment highlighting the negative effects of delayed payments for the transport sector. The proposed solution – legal regulation of payment terms – is a good step towards solving the problem, but it will take time and effort to implement any policy.
Good news is that carriers don’t have to wait for politicians and lawyers to come up with rules. With TNX, carriers will get paid quickly and reliably.
TNX pays carrier 7 days after the job.
Compared to the average terms of the 20th of the following month, this is a remarkable difference. TNX pays on average 35 days faster.
Why pay so fast? In part, it’s about doing what’s right for the people that do the job. The carrier has done the work, and there is no reason why he shouldn’t get paid. To delay payment is inexcusable, regardless of “that’s how it’s always been done.”
Trucking companies are not banks. Asking them to fund their customer’s operations seems both callous and short-sighted. It’s not that accounting processes cannot handle such a quick payment cycle. We live in 2017, not in 1957. Xero and MYOB are revolutionizing accounting, making it easier as ever to keep books up to date and pay fast.
The deeper reason for faster payments though is that it is good for both sides. While a long payment cycle seems like a cheap way of funding for a cargo owner, it isn’t.
Carriers have to pay the bills somehow, and while they are waiting on their invoices, they get the cash from other sources: Bank overdrafts, factoring, short or long term loans, delayed investments in new gear, and even deep cuts to the owner’s personal lifestyle. All of these come at much higher costs for the carrier than they come for the cargo owner.
The only way for the carrier to recoup the costs of financing is to raise pricing. Thus, the one that is paying for the credit line is the cargo owner via higher costs.
Nobody enters the transport industry to write invoices, yet it has always been a necessary evil. Writing invoices doesn’t move stuff, and moving stuff is how carriers add value to the economy.
TNX takes care of the hassle of writing invoices. No more need to set up a customer, no more Friday afternoons spent hunched over a computer writing invoices.
Payment needs to be certain, and plannable. When a carrier completes a job, he should know as soon as possible that he will get paid, how much he will get paid, and when he will get paid.
And yet, we hear from carriers that they have to deal with a lot of uncertainty on payments. Any small disagreement with the cargo owner can delay payments for an unforeseen amount of time. Payments come almost as surprises and are certainly not predictable.
If a carrier completes a job with TNX, he can be certain he gets paid in 7 days. No ifs or buts. No delays.