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Would You Loan $3,000 to a Complete Stranger?
The fact is that every day there may be thousands of brokers loaning money to complete strangers.
Here’s what I’m talking about.
Let’s say that you, as a freight broker, just agreed to move a load for a new shipper. He tells you what he needs: 1 pick, 1 drop, a reefer, picking up Wednesday at 7 am at Point A and delivering to Point B.
He agrees to pay you $3,000.
So, you post the load and then here comes Hop-a-long Cassidy Transportation who agrees to move the cargo for $2,700. And you agree to fund the driver $900 as a fuel advance after the load is picked up.
Sounds okay, right? But, what’s wrong with this picture?
You gotta run a credit check on the shipper. And if you don’t, who knows when you’ll get paid?
Before you agree to move a load for a shipper, you will insist on knowing when to expect payment after delivery. You start first with asking the shipping manager how quickly they pay freight brokers.
You don’t care how quickly they pay the water bill. You need to know quickly they pay freight brokers?
So you run a credit check before you get a truck. You should be able to learn how many days on average does the shipper take to pay freight brokers.
You should also learn the trend on how they are paying over the past 12 months.
All I’m saying is that you need to know when to expect payment before you lock in with a trucking company. It just makes good business sense.
I know QuickBooks will let you run an accounts receivable report with all of the outstanding invoices; but I provide spreadsheets in my training that give you a view of your estimated receipts and disbursements over the next two or three months. And, with this spreadsheet, you’ll have a running balance of what’s available in your checking account.
You’re just trying to learn if there may be any cash shortages in the next 2 or 3 months.
So, you qualify shippers upfront to avoid those poor payers. After all, you’ll need to get the truck paid soon after delivery. Please don’t delay your payment to the truck just because you ran short of cash.
You’ll be out of business in short order.
I’ve got some more “tidbits” for you. Go here:
I hope this helps.
One more thing – I’ll be back in El Paso for live training. There are several people waiting for my return. Get in line – it’s first come, first served. Call me with questions. Time is FLYING!