After exploring the different factoring programs OTR Solutions offers, you may find yourself thinking recourse factoring is the best option for your business. While recourse factoring comes with additional responsibilities for the carrier, it’s often the best option for medium- to large-sized fleets and can open the door for further growth.
There are several differences between our non-recourse and recourse programs, but we are going to focus on two of the major differences. On recourse, you’ll be able to factor invoices for more brokers or shippers, but you are taking on the risk of chargebacks for unpaid invoices.
We work with thousands of different brokers and shippers, but like all the best factoring companies, we do have a no-buy list of companies we don’t work with because they don’t meet our customer approval standards. On the recourse program, however, we will work with most customers from our non-recourse no-buy list. During the factoring process we don’t want to limit who you can factor with, but this could subject you to chargebacks for unpaid invoices after 60-90 days.
You might be wondering why anyone would run with no-buy brokers or shippers and take on a risk of a chargeback. Just because OTR could not approve a broker for everyone, doesn’t mean they’re a bad company. They simply did not meet our approval criteria for non-recourse customers.
If all no-buy customers aren’t that bad, why would there be chargebacks?
Chargebacks can occur for various reasons, but OTR Solutions does everything in our power to help avoid them. Sometimes chargebacks happen because of unresolved paperwork issues, like rejected paperwork for ineligible or missing bills. Maybe there was a claim on a load and the broker put your account on a short-term hold. We all know how long it can take for a claim to be resolved! Other times the broker pays very slowly or even shuts down their business!
While we have solutions for these issues, it can often take an extended period to resolve. Chargebacks don’t mean you won’t see that money again, so if the invoice pays later, we will always get you refunded. Chargebacks shouldn’t occur often for anyone, but they do occasionally happen. What’s important is that you have a factoring company that has chargeback solutions and can help you avoid these issues and can support you if they happen.
What’s the OTR Advantage? How Does OTR Help You Avoid Chargebacks or Significantly Reduce the Chargebacks You Saw With Your Previous Factor?
If you don’t have chargebacks with your current factor, or you do direct billing and don’t have issues collecting full payments on time, you should NOT start seeing chargebacks with OTR. We’re always working to help you reduce chargebacks, not increase them. We’re dedicated to fueling the success of your business, so keep running the way you’ve been, and nothing will change once you factor with us.
If you are having issues collecting, whether that’s with a factor or through direct billing, OTR can help you mitigate this issue. We’re confident in our ability to handle your cashflow needs and keep those funds in your pocket. Here are some of the ways we do it as a chargeback company – We have a dedicated A/R (Accounts Receivable) team, complete transparency through our portal, consistent communication, and a dedicated team for each client.
A+ Collections Team
Our team has mastered the collections process and even though you’re on recourse, they still assist you with collecting payments. They’re one of the best A/R teams in the business; They know the industry, they know the brokers, and they know how to bring in the payments!
Transparency
We find transparency to be incredibly important when you’re on a recourse program – How can you make sure you’re avoiding chargebacks if you’re not in the loop? Thankfully, you can see everything in our client portal! You have full access to your aging, so you can track invoices, see paperwork issues that need to be fixed, and ensure payments are coming in—all in one place.
Communication
We have a weekly alert system to let you know of any issue that is preventing payment. You’ll be able to see the work of our A/R team, communicate with them through the portal, generate reports, track transactions, and see your pay status. We know it’s important to work together to keep your account running smoothly, and that’s exactly what we do.
The OTR Team is Dedicated to You!
The most effective way we can help you avoid chargebacks is by assigning you a dedicated team that will be with you every step of the way. Do you have a broker offering you amazing rates, but you aren’t sure how risky it is to run a load for them? Give your team a call and they can help you evaluate the risk, tell you if they’re in good credit standing, average days to pay, or if they have specific invoicing requirements. Your team will have an excellent understanding of potential issues and necessary components for timely payment. They will communicate with you every step of the way to ensure your receivables are protected.
“Chargeback” can be an unsettling word, and no one is happy when it happens. OTR understands this concern and that’s why we’re focused on making this a non-issue for our clients. We won’t pretend chargebacks don’t exist, but the OTR difference is that we care about finding a solution and avoiding the primary causes of this obstacle.