How to Handle Extended Pay Terms Without Breaking Your Brokerage

Extended customer payment terms are emerging as one of the toughest financial stressors for freight brokers, who are often left to carry the full weight of delayed receivables.

In a recent FreightCaviar LinkedIn poll, brokers ranked extended pay terms as the #2 challenge in 2025, second only to new customer acquisition. The issue is a structural threat to operational stability. 

Market Snapshot: Why This Matters Now

Extended pay terms are hitting harder in a freight market that’s still under strain. 

Rates remain soft, diesel prices are dropping, and brokers are under pressure to operate with less margin, more compliance, and longer float cycles. These conditions make it harder than ever to front payments to carriers while waiting on shipper invoices.

• C.H. Robinson reports dry van cost-per-mile is expected to rise just 4% in June, meaning soft rate recovery and ongoing overcapacity. 
• Diesel prices fell to $3.49/gal in May, continuing a 27-month decline, mirroring freight demand softness. 
• Overall, spot rates remain subdued and are unlikely to rise materially before July. 

What That Delay Really Costs

Extended payment terms don’t just delay revenue; they affect nearly every part of a brokerage’s operation:

• Cash Flow Squeeze: You’re paying carriers well before receivables clear.
• Carrier Trust Issues: Delayed payments strain relationships with key partners.
• Manual Overload: Back-office teams are stuck chasing paperwork and updating spreadsheets.
• Growth Roadblocks: Without liquidity, it’s harder to hire, invest, or take on new business.

What Smart Brokers Are Doing Now

Here are a few tactical moves brokers and 3PLs are using to manage the widening float gap:

1. Audit Your AR Aging Report: Identify which customers consistently pay late, how far beyond terms they go, and how that impacts your carrier payment strategy.
2. Create Tiered Carrier Pay Rules: Build payment models based on carrier value, volume, or reliability. Offer faster pay to core capacity while controlling costs for lower-priority lanes.
3. Automate Invoicing the Moment Docs Hit: The faster you invoice, the sooner the clock starts. Integrated platforms help eliminate delays caused by incomplete paperwork or backlogs in manual approvals.

Tech-Powered Cash Flow Stability

Epay Manager’s industry-leading AI Audit Document Insights engine supports smarter invoicing, audit, and payment workflows, purpose-built for the demands of freight brokers.

What is it?: Epay Manager’s AI Audit is trained by all invoices processed by OTR Solutions, allowing it to learn from real broker and carrier behavior and streamline audit, approval, and payment workflows.

Why it matters: This intelligence helps speed up approvals, reduce bottlenecks, and improve invoice workflow visibility, especially valuable when managing extended payment cycles.

OTR's centralized intelligence ecosystem powers both Epay’s AI Audit engine and OTRintelligence for factoring, making it one of the most advanced and high-performing document automation systems in the transportation industry.

With Epay Manager, brokers can

• Speed up invoice delivery and reduce disputes.
• Centralize carrier invoicing (AP) and customer billing workflows (AR) into one dashboard.
• Enable same-day clearance for carriers, regardless of shipper payment terms.

Extended Pay Terms by the Numbers

Epay clients are doing more than just weathering extended terms. They are outperforming the market.

• In a healthy freight market, average DSO (Days Sales Outstanding) typically hovers around 45 days and can stretch to 60+ in weaker cycles.
• Brokers using Epay Manager have maintained average DSOs under 40 days, even during the recent market volatility.
• From December 2024 to June 2025, Epay clients saw an average 18% drop in DSO.
• Two brokerages that joined Epay in mid-2024 each reduced their DSO by 10 and 12 days, respectively.
• DTI (Days to Invoice), a leading indicator of AR efficiency, fell 25% YoY for Epay users.
  • One brokerage cut its DTI from 10 to just 0.7 in 3 months.
  • Another went from 2.65 to 0.6 in the same timeframe.

These numbers show that shortening the float is absolutely possible...with the right tools.

Streamlining Broker Payments: Insights from Recent Epay Manager Webinar

Explore innovations in broker payment processing. Learn how the leading platforms stack up against common pain points like inaccurate paperwork, cash flow constraints, and fraud vulnerability.

FreightCaviarAdriana Pulley

Control Your Operations, Even if You Can’t Control Shippers

Extended payment terms aren’t going away. But with systems like Epay Manager + OTRintelligence, brokers can shorten their float, safeguard carrier relationships, and stay competitive. Want to learn more? Click here.