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Getting a signed credit application from every customer is one of the most important actions a local trucking company can do to protect itself.  What is most important is NOT the bank information, or the references.  The important part is the fine print.

Somewhere in every credit app there should be statements that:

• The customer agrees to pay invoices within XX days
• If not paid on time, the interest rate is XX%
• Customer pays collection costs

If your credit app does not contain this verbiage, find one that does and copy the key sentences.

The reason this is so important is that, without this language, a court may rule that the customer never promised to pay and therefore does not have to!  Without a formal contract, the credit app is the only document wherein the customer promises to pay you.  This is very important if any collection effort is needed in the future.  If there is not a provision for interest, the court will not grant any interest!  Finally, it is very expensive to take a customer to court–and unless the customer has agreed in advance to pay for this expense, the court WILL NOT award collection expenses!

You never want a prospective customer to think about these issues, so present the document in a non-threatening way.  Say “I know you have not decided to use us, but I want to set up an account just to be ready.”  If they do not want to give a bank reference, or even customer references, NO PROBLEM!  The most important thing is the signature anyway.  We recommend wording, in big bold letters, that signing the credit app DOES NOT obligate the prospective customer to ever use the local trucking services.  Point to it when asking for them to fill out and sign the credit app.

Your local trucking business will benefit from following the simple steps above for a credit application with teeth.

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