Days sales outstanding
The headline cash measure, tracked by customer as well as overall.
Logistics and freight companies · Invoicing and collections follow-up
Shorten the time between delivery and cash in the bank
Brokers usually pay carriers within days, through quick pay or factoring, but wait 30 to 60 days or longer for shippers to pay. Every day between delivery and invoice, and every invoice that sits unpaid without follow-up, is working capital tied up. Rejected invoices for missing documents or wrong PO numbers add weeks.
How it often works today
- Invoices go out in batches a few times a week, so the average invoice leaves several days after delivery even when paperwork is complete.
- Shipper portals, such as those for large retailers, reject invoices for missing PODs, wrong PO numbers or format issues, restarting the payment clock.
- AR follow-up happens when someone has time, usually for the largest balances, while small invoices age past 60 days unnoticed.
- Short-pays for accessorials or claims are not tracked by reason, so the same disputes repeat with the same customers every month.
We would focus on getting invoices out quickly with complete packets that match each customer's requirements, then following up consistently. Disputes, short-pays and credit decisions stay with your AR lead, who knows which customers need a phone call rather than an email. Most of the gain comes from speed and consistency, not new software.
The improved workflow
Invoice when the load is billing-ready
As soon as a load has its required documents, the invoice is generated in the TMS and sent, rather than waiting for a weekly batch.
Build packets to each customer's rules
Customer requirements, such as PO format, required documents and portal submission, are recorded once and applied automatically to every invoice.
Scheduled, account-aware reminders
Polite reminders go out at set points before and after due date, with copies of the invoice packet attached, adjusted for each customer's payment terms.
Route disputes to a person
Replies that mention disputes, short-pays or claims go to the AR lead with the load history and documents, and each is tagged with a reason.
Weekly aging review
The AR lead reviews aging by customer, rep and reason, and flags customers whose payment patterns suggest a credit limit review.
How we deliver this: AI automation for small business or fractional CTO leadership, scoped in writing and run over 90 days. See pricing or the sample scope.
What we would measure
Days from delivery to invoice
The part of DSO your team fully controls.
Invoice rejection rate
Portal and customer rejections restart the payment clock, so this should fall.
Short-pays by reason
Recurring dispute reasons point to fixes in quoting or documentation.
Where people stay in control
- Credit limits, payment plans, write-offs and collection agency referrals are decided by the AR lead or controller, never by automation.
- Messages to key accounts can be paused by the account rep, and tone is reviewed so reminders match the relationship.
- Remittance and bank details are only changed after verification with a known contact, as a defense against payment fraud.
Example
Illustrative: a broker with $1.5 million in receivables
For example, a brokerage billing about $3 million a month runs a DSO of 45 days. Invoices go out on average three days after delivery and about one in twenty is rejected by a portal. Invoicing on billing-ready status, building packets to customer rules and following up consistently could bring DSO down several days. At this volume, each day of DSO is roughly $100,000 of working capital, illustrative but significant for a broker paying carriers in days.
Tools typically involved
What the first 30 days look like
In the first 30 days we would analyze six months of invoices for delivery-to-invoice time, rejection rate and aging by customer, record each major customer's billing rules, review current follow-up, and pilot same-day invoicing and reminders with a few customers.
Common questions
Should we use factoring instead?
Factoring speeds cash but costs a percentage of each invoice and can affect customer relationships. Many brokers use it selectively. Faster invoicing and better follow-up improve cash either way and reduce how much you need to factor. The choice is a finance decision for your controller or CFO.
What about customer portals?
Large shippers often require invoices through their own portals, and each has rules. Some TMS products support EDI 210 invoices or portal integrations. Where they do not, we would document each portal's requirements and check whether submissions can be prepared automatically for a person to submit.
Will reminders annoy shippers?
Reminders that include the invoice, the POD and a clear reference usually help payables teams rather than annoy them. We would set tone and timing per customer and let reps pause reminders for sensitive accounts, then watch replies during the pilot.
The business case
Does it pay for itself?
Illustrative defaults for a logistics company. Replace them with your numbers.
What this workflow costs today
a month in staff time, before any lost sales
Monthly fee + assumed tools +
Break-even: new clients a month (at first-year value)
Or: staff hours recovered and redeployed
Break-even additional revenue
Value of +1 point of win rate
First 90 days, service fee
Worth a closer lookTest the assumptions
Illustration only, not a forecast or guarantee. Recovered staff time becomes a cash saving only if spending actually declines or the time goes into paid work. Tool costs are an assumption; we replace every number here with yours before recommending a scope.
Invoicing and collections follow-up in other industries
Accounting and CPA firmsArchitecture firmsAuto repair shopsCommercial cleaning companiesConsulting and professional services firmsDental practicesElectrical contractorsEvent and catering companies
Invoicing and collections follow-up: full guide
Related guides
How to automate invoicing in QuickBooks OnlineDocument processing automation for service businessesHow to measure the ROI of AI and automationAI automation for small business: costs, limits and what pays back
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