Payment terms with direct customers

Its not finaced its a discount. No financing involved. Nothing is compounded monthly, its a one time discount per invoice. If i do one load a year for $2k the discount would be $40.00 end of story.

 

exactly.....

You get the golden pencil award of the day.

That and $5 will get you a coffee at Starbucks....

 

you divide the interest rate, not the principal.

 

Any way you look at it it's financed. Whether it's discounted or borrowed it's done on a 30 day turn. If your went to the bank and borrowed 20K@6% waited 30 days to be payed and pay back the loan you would pay 100.00 in interest.

 

I'd like to see a load that payed $20,000 in one trip.

 

It's because it's dollars over time. It IS only 2% but because it is for only 1 month, it is EQUIVALENT to 24% per ANNUM. Consider this, would you discount 2% for them to pay you 1 day early? or how about 1 hour sooner? It's STILL only 2%. I know these are unrealistic extreme examples, it's just to make a point. If cashflow is that tight, you could set up an operating line of credit and even if the bank charges 10% (since bank rates are per annum), for ever dollar you paid in interest you would make $2 by not discounting your invoice to be paid 30 days sooner.

 

There out there its called oversize/heavy haul.

 

wtf are these guys talking about? I've never seen or heard of any shippers or brokers giving or taking interest on balances due to trucking companies.. some factoring companies do. and it's nothing like what you fellas are talking about.

They just take a one time charge on whatever amount owed to you. no monthly payments. no interest compounded monthly or yearly. no hard math. simple percentage.