So your packages are on the way! Or maybe even delivered! Amazing. Now it is time to get paid! Well not so quick…Delivery companies will not pay you immediately, even if they received money on your behalf from the customers. Usually, they will pay with 7 to 14 days delay, but don’t be surprised if this will be stretched to more than a month. At the same time, you will pay for all the shipments instantly. Let me tell you how it looks like in the real world. You pay for everything you send and you will receive random payments after random time with random additional invoices for returned packages because undelivered packages will be charged additionally later after the courier company determines that they cannot deliver. Sounds easy? If it’s not, keep reading.
Welcome to the e-commerce world! I am so happy that you delivered your first parcels, but let us make sure that you will be paid for them and it will be clear for you how much you have paid too.
As I mentioned before, many delivery companies will send you invoices soon after the package is dispatched. Usually, you will also get some credit limit so there is no need to pay immediately. At the same time, all of the cash on delivery shipments will be collected by the courier but not paid to you immediately. There is a week or 2 weeks delay before the money will be credited to your account. That way it is easier for courier companies to reconcile the customer’s account, remember that shipments sent 2 weeks ago might still be in progress if delivery is to another country! Those undelivered packages will come back to you at a later stage with another invoice which will have an only airway bill number, and interesting thing here – it will be a NEW airway bill number! Many companies ship under one airway bill and return under another airway bill so tracking for what you are paying is becoming a real pain. Solution?
Track every shipment
You need to keep track of every shipment which you send, and the history of this shipment. Something like this:
that way you will know what is happening to your packages and it is very useful to see if any shipments take too long as you can see the transit time here, but it is still not solving our problem with payments. But take a look at this!
Let us analyze here for a second the 2 main functionalities that you see on our Advanced Order Management System – “Shipping charges” paid and “COD Received”.
These 2 simple columns can literally save your life. Whenever you see an invoice from the company with a payment that needs to be made – you tick the box. Whenever you receive an account statement with the shipment that was delivered – you check the box. At the end of the month, you can easily filter out the shipments that have never been charged to you, and the shipments that have never been paid to you. But there is more to it!
If it happens that you receive an invoice for the shipment that was already charged in the past – there you go! This information is right there on the screen for you! You can protect yourself from paying twice for the same shipment which can happen trust me, as many delivery companies don’t have a proper system to manage their finances.
There is a lot more to finances when dealing with international shipments but let us leave it for the next part 🙂
One thing for sure, there is nothing more important for you than your shipments and your money, as you pay for packages immediately and the money will come back to you later, you constantly need to keep an eye at your operating capital and final balance of your account. If you neglect it you will find yourself feeling completely lost about the situation and unable to track your income. Don’t let that happen! Any other great ideas for tracking the finances?
Part 3: Billing statements
Part 4: Marketing (coming soon)