The cash cycle in freight
Logistics firms pay fuel, drivers, tolls and subcontracted carriers as the work happens, and are paid weeks later. Margins are thin, so a single large customer paying late can strain the whole business. Controlling spend and shortening the cash cycle matter more than almost anything else.
Controlling driver and fuel spend
- Issue a card per driver or vehicle with limits on amount and type of merchant.
- Review transactions daily instead of at month end.
- Match receipts to jobs, so the true cost of each load is known.
- Cancel or replace a lost card instantly, without affecting the others.
Paying carriers and partners abroad
Cross-border carriers expect payment in their own currency. Paying from an account that holds that currency, at a clear exchange rate, avoids hidden bank margins that can exceed the margin on the load.
When customers pay late
Ask for shorter terms, invoice the same day work is complete, and charge for waiting time where your contract allows. If gaps remain, invoice financing lends against money customers owe you. It speeds cash up but costs more than waiting, so use it for gaps, not as a permanent source of funds.
Insurance is specialist
General small-business policies often exclude vehicles, cargo and goods in transit. Ask for cover that names them, check the limits against the value you carry, and read the exclusions.
Common mistakes
- Relying on one large customer for most revenue.
- Not charging for detention or waiting time.
- Letting driver spending run without limits.
- Using general insurance that excludes cargo.
- Waiting to chase invoices until they are well overdue.
Wallester Business
Ramp
Pleo