Get Paid On Time, Every Time with Collection Automation for Transportation and Trucking
Managing accounts receivable can be a nightmare for trucking companies and other transportation providers. Many transportation companies struggle with increasing freight volumes, driver shortages, and overall capacity that is stretched to the limit. Most carriers we encounter welcome the opportunity to get automated tools to ensure that they get paid on time, every time.
Our collect-IT for Transportation accounts receivable solution helps turn transportation companies into cash generation machines. By integrating collect-IT with your ERP (enterprise resource planning) system, you reduce the amount of time it takes to get paid. Learn how one of our success stories, IMC Companies, transformed their business with collect-IT.
Read the Full IMC Success Story
Based in Memphis, TN, IMC Companies is a national network of intermodal logistics businesses providing container drayage, expedited services, customs brokerage, truck brokerage, freight forwarding, warehousing, chassis provisioning, and secured container storage. The company was using the Microsoft Dynamics Professional Advantage Collection Management module, but they were missing some key functionality to handle complex collections.
The Challenges: Managing the Complexities of Collections
The trucking and transportation industry is responsible for moving 73% of the nation’s total domestic freight. It manages about 80% of the U.S.’ total $792 billion gross freight revenues. There are nearly four million registered Class 8 trucks that travel roughly 305 billion miles on domestic roadways every year. The average annual revenue is about $600 million.
General freight trucking, specialized freight, flatbed trucking, and truckload carriers that manage B2B transactions need an industry-built solution that helps reduce the time it takes to collect cash, improves cash flow, minimizes collections efforts, and builds strong customer relationships.
As a trucking firm’s payment cycles extend beyond normal ranges, it becomes more difficult to run a profitable business. You are in business to move goods and are not equipped to be a bank for your customers. If you do not offer to extend payment terms on account, for example, the retailer will just take its business elsewhere. In many cases, the transportation provider serves as a bank while its customers use the money owed for working capital. As accounts receivable collection times increase, accounting personnel spend more wasted time reissuing invoices, sending out statements, emailing reminders, and following up on outstanding invoices. Multiply these activities across the $600 million or so in annual revenues that the typical trucking firm brings in and the manhours add up quickly without the right software.
Adding to the complexity, many transportation firms have contracts with multiple subsidiaries of the same parent company (e.g., Walmart and Sam’s Club, for example). One delivery may involve multiple invoices sent to different recipients. Each recipient may have different payment terms, invoicing requirements, and contract terms, all of which have to be factored into the trucking company’s billing system. There are countless negotiations that require you to track custom options that usually end up delaying the payment cycle. IMC Companies was facing many of these challenges. Here's how we helped...
The Solution: collect-IT for Transportation
IMC Companies switched to Dynavistics’ collect-IT for Transportation to help create multiple strategies by customer, invoice amount, and invoice type. They were armed with automated reminder letters and call lists. Also, they could now handle national accounts with parent/child organizational structures. Collect-IT AR automation for transportation provides an ERP sync option to schedule updates to trigger automatically or manually depending on the collections department preference.
“Collect-IT made the collection process more automatic, with 80% of our smaller collections working well with the strategy and letting us focus on larger, more strategic accounts,” said IMC’s Collections Manager.
Serving about 50,000 customers, IMC experienced revenue growth of 33% in 2020 due to COVID and increased demand for shipping. It generates an average of 40,000 invoices per week with terms ranging from 30 to 60 days. They had a team of seven collection representatives that handled all invoicing. Even when revenue increased, they only had to hire one additional team member.
Within one year of switching to collect-IT, IMC reduced its days sales outstanding (DSO) by 6.2 days while also reducing its bad debt and increasing its cash flow. Other key wins include fewer invoice disputes, a lower volume of aging invoices that are past their due dates, and improved cash flow in a low-margin, price-sensitive business environment. Today, the company has a reliable audit trail for proving its invoice amounts to big-box retailers.
IMC Success Story: Measuring the Benefits
Since implementing collect-IT, IMC’s 90-day receivables volume has dropped dramatically. Since IMC now needs fewer AR representatives to resolve billing disputes, the company lowered payroll expenses by doing more value-added work with less personnel. Finally, since implementing collect-IT, IMC has continually improved its AR and customer service operations.
“We have used the built-in tools and strategies in collect-IT to help seven IMC Collection Reps handle
40,000 invoices per week with automation features,” said Kevin Powell, Vice President of Financial Systems. “It also helps with contract and billing disputes by enabling collectors to easily pull up previous communications and supporting documents with a few simple clicks.”
The Time for collect-IT for Transportation is Now!
Right now, trucking companies and transportation firms are getting their cash flow squeezed thanks to longer payment cycles. Their days sales outstanding (DSO) are increasing, AR turnover is decreasing, and some of their largest customers are basically using them as banks. Collections, a process usually managed by a handful of accounting clerks that have other responsibilities, takes a lot of time, effort, and manpower to manage.
Collect-It for Transportation is a modern collection and accounts receivable management solution that integrates with multiple ERP software platforms. By integrating with your current ERP, it helps you get the most out of your AR collections process, improves positive cash flow, and lets your accounting team focus on more important tasks.
To learn more about how collect-IT can help your company achieve these and other goals, download Dynavistics’ eBook. We lay everything out for you, give you the call scripts you need to rev up your cash generation efforts. Email template samples are provided for reminder and dunning letters. We help you with the complete strategy and help you work toward getting paid on time, every time.