Late Payments: How to save your business- interview with Cristina Vecchio, Payment Solutions Manager Alpega

Approximately 43% of companies in Europe declare themselves at risk due to late or non-payments from their debtors, according to the European Payment Report 2020. Cash flow is a key factor for every business financial stability. We interviewed Cristina Vecchio, Payment Solution Manager of Alpega Group, and an expert on the subject of late payments. Her answers bring enlightment and hope to carriers, as she shares the best practices to avoid overdue payments and tell us why securing payment of transport invoices with Teleroute just got easier.

1. From a recent study from Coface, 92% of participants reported payment delays in 2020. Do you think that percentage represents the reality of our customers - why?

According to our experience, all companies sooner or later report payment delays; therefore the percentage pointed out by Coface, even if it could sound exaggerated, is more than reasonable. We must consider that in the Teleroute Freight Exchange, our customers are primarily searching for new business opportunities, whether this concerns new lines, new customers, or new countries. With this in view, they accept the risk of working with companies that are unknown to them, at least initially, and of whom they don't have enough references. Even though our customers are filtered and monitored during their contract in the freight exchange, starting a new business is always more delicate and often implies more risks than a long-established one.

Additionally, the COVID-19 crisis has pushed the European Community's insolvency rate from the initially planned 2% to a final result of 18%, which of course, has strongly impacted the solvency of all debtors.

2. What innovations is Teleroute's Payment Solutions team working on to alleviate payment issues?

Related to the abovementioned situation, we see that transport professionals struggle with two main payment issues. The first is that carriers cover themselves the transport costs (fuel, highways fee, tires, etc.) but have to wait several weeks or even months to receive the payment of their services. Therefore, they run short of money. The other issue they face is that carriers not only cover the costs, but they are not entirely sure they will be paid at invoice payment term.

As these issues have a burdensome impact on their businesses, in Teleroute we have been working to mitigate these problems, offering a solution that covers each matter: FastPayment to secure cash flow without getting into debt and Payment Guarantee to always get paid.

FastPayment allows carriers to anticipate the payment of an invoice just after the delivery of the goods. With Payment Guarantee, carriers can secure 90% of the payment of their invoices when they are due. Our goal is not only to offer business loads and vehicles through our freight exchange, but also the means to take care of the payments related to the transport business. We offer solutions available in the same Teleroute application, which are inexpensive, super easy to use, and don't require tons of documents.

3. How does the Payment Guarantee "Bridge" work?

When saying "bridge" we refer to the link between Teleroute, Wtransnet and 123cargo freight exchanges. Through this link, load and truck postings are shared among these platforms so that our customers can benefit from a larger number and variety of loads. With the Payment Guarantee on bridge, our carriers can guarantee the payment of an invoice with any other customer of any of these three freight exchanges. The fee, process, and conditions remain the same as within Teleroute, as well as the way to buy a guarantee: it can be easily obtained by clicking on the Payment Guarantee link in the offer details or in the section "Payments" in the upper menu bar.

4. Can you tell us more of what makes Teleroute's Payment Guarantee unique?

We also heard there is a change in fees. Would you mind explaining this? There are many interesting points about the Payment Guarantee service offered by the Teleroute Freight Exchange. First, the advantage of accessing the service directly via our platform is that carriers don't need to spend extra effort looking for an external provider and negotiating the cover conditions individually. Apart from that, we offer a very interesting reimbursement coverage, one of the highest in the market. Our insurance partner covers 90% of the total invoice amount and accepts debtors from nearly all the European countries available on our platform.

We have also changed fees to make the process even more convenient and affordable. Fixed fees when requesting the service are now eliminated, hence you only pay the 1,99% of the invoice amount. We also open Payment Guarantee for claims in all EU currencies.

Moreover, carriers can choose to use the service on a case-by-case basis only when they consider it necessary. Hence, they are not obliged to buy a guarantee for all their customers. In this sense, it is highly recommendable for companies that choose to open new lines or start working with new customers. In this way, you significantly reduce the risks of opening a new business line.

Let's also point out that the use of Payment guarantee is associated with our Mediation service. This is an essential point for two reasons. First, our Mediation team always tries to recover 100% of the invoice amount for the carrier. Secondly, because managing the mediation within our platform increases the chances to recover the payment thanks to the presure measures we can use with debtors.

5. Who provides the guarantee?

Alpega has partnered with Coface Group to provide the Payment Guarantee. Coface is a world leader in credit insurances for exports and number one in insurability classifications with @rating. It is the primary information source in France, and it manages the French government's public guarantees for the export.

Coface provides unique solutions to more than 70.000 customers in 75 countries around the world. The group also offers access to two international networks, CreditAlliance and InfoAlliance, an international credit insurance network, which shares a database with more than 41 million companies worldwide. Coface Group is quoted on the Paris stock exchange, and its shares are included in the indexes SBF 120 and SBF 250.

6. Is Payment Guarantee valid for transport deals offered outside Teleroute? 

Yes, Payment Guarantee is also valid for loads offered outside the Teleroute environment. The only condition is that the debtor needs to be as well a customer of one of the Alpega Freight exchanges (Teleroute, Wtransnet, or 123Cargo).

7. Any last tips when it comes to businesses dealing with many unpaid bills?

It is crucial to follow some basic but essential rules to balance the need for business with the necessity of being paid afterward in all activities.

First and foremost, carriers should be careful when accepting a deal. Let's not trust load offers with a remarkably high price or conditions that are not in accordance with the actual market situation. Either way, why would somebody pay you double your trip's usual worth?

Let us also be prudent when working with an unknown company, especially before accepting several trips for thousands of euros. In that case, we would recommend carriers to carefully check the debtor and their financial situation and ask for references if possible, you can get support from our business assistant and check our customer ratings Teleroute offers information about our customers (how long they have been with us, if we have managed payment incidents with them, etc.), so this can be a good starting point for this check, even if it should not be the only one.

If you have many unpaid bills, please remember that we offer a Mediation service that can help you recover the money. Our recommendation is to use Payment Guarantee to secure payments until you get to know your customers and their paying habits for future deals.