Dodged a bullet

My wife and I were talking about our customers yesterday, and somehow the topic came around to ones I've let go, aka stopped doing business with. There was one that had started out with promise, but after we did the second load for them, there had been enough warning signs to not load them until we got squared away. Incidentally, it was one of the rare ones I decided to direct bill and not factor. They had offered a quick pay with no discount and initially looked ok credit-wise. At the end, they did pay on the contracted rates and only a day late. However, they didn't come through on some promised detention pay. After three attempts to collect, I decided to let it go and move on.

It wasn't much money and it wasn't in writing or expected in the first place, so more an issue of dishonesty to me. If they'd have just been up-front about it and said we can't get anything for it in the first place, I'd have been ok with that. Lucky for me, I fired this customer over $325 of "found" money that never got paid.

We were having this conversation while sitting around web surfing, so I pulled up their web address. Up pops a generic GoDaddy.com placeholder page. Hmm. So I did a carrier search. FMCSA reports their insurance ran out about three weeks ago, followed by authority being revoked.

Apparently, out of business. Had it not been for me dropping them over that verbal offer they never paid on, I would have kept loading them. It wasn't like they were keeping me going with back-to-back offers, but it could have been much worse than the little bit I got bent out of shape over. As it were, I got paid on the contracted stuff and ended that relationship with only a month to spare.

 

On this one the terms had gotten a little squirrelly but nothing too remarkable. Enough to raise caution but not get immediately defensive. I don't believe they were troubled at that point, more a case of misleading language from the salesperson. When they did pay, it was a call with a t-chek first thing on the third morning after delivery of my paper bills and invoice. So not quite the promised two-day pay, but close enough.

2bit: Exactly. They didn't do anything outrageously wrong. I just felt if I was getting the run around about a $325 verbal commitment, that would become one in a row. Otherwise I might have been stuck over thousands instead.

 

I use Freight Capital.

Which brings up another reason a bullet was dodged in this case. If memory serves, the customer I mentioned came back with a full-recourse approval (I run credit checks on all, even if I don't factor them). Checking that against what Transcore had on them, it was lack of information mainly. TC showed them paying good. Had it been a larger or more established company, Freight Capital would have issued a no-recourse approval that would have mitigated my risk on 90% of the invoice advance.

Freight Capital will do full-recourse approvals on smaller outfits they haven't carried invoices for, until they can establish their own history with them. In this case, my last invoice was on Mar. 2, and the corresponding payment was deposited on Mar. 8. Had I factored them, that would have put the 30-day mark in early April. With their insurance ending on April 15, that would definitely have put my payment at great risk.

With full recourse approval on that one, I'd have had to pay back the invoice advance if they went out of business and didn't pay.