Soaring fuel prices for players in the transport and logistics sector make it all the more important to optimise your gross profit. You cannot change fuel prices. But you can streamline your credit management to achieve a healthy boost to your gross profit margins. And that can make all the difference in this time of crisis!
Wondering how? These five tips will take you all the way.
1. Automate your debt collection and reminders for improved gross profit
If your customer doesn’t pay their debt on time, chasing it down can quickly eat into your tight margins. The job may then break even or even become a loss.
Automation plays a crucial role in preventing such outcomes. A decent software app or good programming alerts you when it’s time to send reminders and warnings, and will send these with a single click. This ensures you can devote your time and energy to more complex tasks.
2. Use artificial intelligence to get paid faster
Did you know that the right timing and the right communication channel can make a big difference? Some customers pay the fastest after an email at 10 a.m., while a phone call at around 4 p.m. is most efficient for others. When a reminder puts you top of mind at that moment, you give a hefty boost to the payment procedure.
With the right settings, artificial intelligence figures out when and how you get the best results. And voila, you reap the benefits without any extra effort.
3. Set up a separate invoicing flow for warehousing
Invoices come in all flavours. One invoice is urgent, while another is less so and can wait. So does lumping all invoices together make sense?
Consider out-of-pocket invoices. As is often the case when warehousing goods outside the European Union, you advance excise duties and customs fees for a customer. So you want to get your money back as soon as possible, much sooner than with other invoices.
The solution is two different invoice flows. One invoice flow for regular invoices (with normal due dates and more relaxed follow-up). And another for out-of-pocket invoices that require stricter follow-up and have short payment deadlines.
4. Optimise your dispute management
Dispute management is time consuming when the information is scattered all over the place. For example, communication with customer service, customer information with the account manager, invoicing department checking the invoice, and so on. That creates a lot of unnecessary email traffic.
So, gather all the information and conversations into one central place and provide direct access for colleagues and customers. This prevents unnecessary emails or phone calls and helps resolve disputes quickly and efficiently.
5. Avoid losses by importing credit information
In the transport and logistics sector, right of retention provides the best certainty in terms of payment. But this route is not always feasible.
The solution is a credit insurance company. You use their provided credit information to calculate an estimate of whether your customer will pay or not. Now you can take informed risks and, if necessary, block new orders.
Want to ensure you never miss alerts from your credit insurer? Then make sure you interface them with your credit management software!
Curious to learn how Billtrust Collections can help you with this? Contact us for a demo.