Understanding the payment risks involved in logistics
Logistics is a huge industry that involves exchange of goods and payments on a regular basis and is often prone to huge losses if there is a disruption in the process of receiving the goods or payments. A recent study conducted by GoComet, a multi-modal logistics platform, found that invoices from freight companies rarely match the final quotation. In fact, they discovered that 75% of surveyed logistics leaders said this is a common occurrence in their field.
There are many reasons why businesses may struggle to get invoices paid on time, such as data entry mistakes, client disagreements and insufficient funds. Therefore, using escrow services for business transactions in logistics will be an ideal solution.
How can you mitigate invoice disputes with an escrow service?
Securing business transactions with solid contracts and agreements is the best way to ensure timely and accurate payments and delivery of goods. However, multiple transactions require a lot of tedious paperwork and time to draft contracts.
Using escrow services for business transactions are beneficial as they help with quick fund disbursement and prevent fraud especially when there are last-minute changes in price or delays in shipment, as it could cause huge losses. Therefore, it is ideal to use a professional escrow service to ensure safe trade. Many digital escrow companies or online escrow services have emerged to provide a quick and easy service with a simple KYC process.
What is an escrow service and how does it work?
Escrow services are a great way for buyers and sellers to ensure accuracy and fairness in their exchanges. A commercial third party escrow service can prevent any potential discrepancies and ensures that both the parties involved receive what they agreed upon. Escrow services for business transactions in logistics is designed to help shippers, carriers and customers transact securely. It is a service where the parties connect and make a deal, send payments to the professional escrow service, deliver the product or shipments to the customer and then the escrow service releases the payment to the sender.
3 benefits of using escrow services for business transactions in logistics
- Simple Process: The commercial third party escrow service process is quite simple with usually a KYC verification. The parties initiate a transaction, submit the payment to escrow and the money is released to the seller and the product or service is released to the buyer.
- Reduce Risk: Escrow services for business transactions provide a secure, trustworthy solution for businesses engaging in high-value transactions. By utilizing these services, you can protect your funds from fraud and misrepresentation while ensuring that goods are delivered as agreed upon before releasing payment, facilitating the smooth completion of any financial exchange.
- Quick Claims: Making a sales deal is often time-consuming as there may be delay in agreements between both parties involved and a delay in payments. However, a professional escrow service ensures that there are no discrepancies in terms of prior agreements and also enables quick fund disbursements.
Let’s Wrap Up!
The logistics industry involves an enormous amount of transactions on a daily basis for shipment of goods. Therefore, there is a high risk of payment disputes. However, utilizing professional escrow services for business transactions in logistics whether digital escrow companies or online escrow services helps with a simple process, quick fund disbursements and risk reduction.
Axlerate is a unified platform for Logistics and transport management, payments and services. Our solutions help to simplify tolls, fuel purchases, fleet expenses, loans, insurance, escrow, payments, truck booking, fleet management and the buying and selling of logistics products and services.
