How can I check a trucking company’s brokers and shippers are paying on time?

Start with the receivables list. It should show each customer, each unpaid invoice and how old it is. Compare the older items with the terms the customer agreed to. A few slow customers may be manageable, but a large share of money owed by one slow payer is a concentration risk. Ask your accountant to compare the report with the financial statements.

Then trace. Pick several invoices from different customers and follow them from the load to the invoice, through to the deposit in the bank. This shows whether payments arrive when the report claims, and whether the company is chasing money or being paid without effort. Look for credits, short payments and charges deducted by customers for damage or delay.

Next, ask about the people and the practice. Who chases late invoices and how? Does the seller use a factoring service or a credit line backed by receivables, and does it carry over? Ask which brokers have gone quiet, which customers were dropped for non-payment and what became of the unpaid amounts. Find out how the company checks a new broker before hauling freight for them, and whether it shares notes with other carriers. Ask what is typically written off in a year.

Key takeaways

• Get an ageing report by customer and compare it with agreed terms.
• Trace sample invoices through to bank deposits.
• Ask about disputes, deductions, write-offs and any factoring arrangement.
• Ask how new brokers are vetted before the company hauls for them.