Given the option in sales terms, ship on a collect basis. The procedures for recovery of freight prepaid and then billed later to the customer are simple enough-so you would not actually lose any of your freight dollars. But why go through the effort to recover the freight charges (which are costs payable by the customer) when all you have to do is move the shipment on a collect basis? This way, you don't tie up your cash awaiting reimbursement by the customer.

Pay transportation charges within credit regulations published in tariffs or contract terms. Failure to so may result in:

Cost penalties. There are tariffs which publish penalties for non-payment of transportation charges within the credit period. These provisions assess interest on the amounts not paid within the credit limits. Potential loss of discounts permitted under proper tariff contract terms. Rules or specific provisions in contracts can carry a penalty of loss of discount provisions if not paid on time. Complete loss of credit. Loss of credit may result in the requirement to prepay all transportation charges prior to pickup. It also results in a great deal of inconvenience and expense. In a large volume operation, this would present an almost impossible task to handle. In addition, the credit period normally allowed would permit a reasonable delay in the actual payment from three weeks to 30 days depending on the terms of credit. There is a possibility of negotiating a longer credit period. The opportunity to extend the credit period to coincide with the credit terms should not be lost.

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