Cash management skills are extremely important for freight brokers maybe moreso than for most other businesses. This is because you normally pay the truck before you collect from your customer. Thus, a gap exists between the time you make pay outs and the time you receive cash.
If this gap widens and snow balls out of control, good luck to you.
Here are the some steps to take that will help you get off on the right foot. One, as you are calling on prospective customers, ask the shipping manager how quickly does his or her company normally pay freight brokers. Two, write it down.
Then three, If you do work with that shipper, compare what they told you with what actually takes place. If there is any big discrepancy, get back with the shipping manager.
No matter how badly you want to start working or continue working with a customer, if they are sitting on your money, you might have to fire them.
There are other precautions and techniques for managing your cash. I'll bring these up in other blog posts.
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