It’s no surprise that a great number of trucking company owners in the US rely on freight factoring to keep the cash on hand they need to run their businesses. Factoring stimulates cash flow, and every trucking company owner knows that cash flow is imperative to running a successful business.
Freight factoring involves selling unpaid invoices at a discount to a third-party freight factoring company for cash upfront. Freight factoring is a service that allows trucking company owners of any size to secure the funding needed to cover the expenses of daily operations.
Rather than waiting months at a time just for customers to pay for loads you’ve already delivered, you can sell your outstanding invoices at a discount for the cash you need today. This instant funding allows you to cover fuel, oil, vehicle maintenance costs, and other extraneous costs such as tow fees. It also allows you the flexibility necessary to seize new growth opportunities and keep your business moving forward, which means you’ll never miss the next job simply because a slow-paying customer hasn’t paid for a job you’ve already completed.
Successful businesses grow only when they service their customers and at the same time manage those customers’ perceptions. In order to keep up positive relationships with your customers, you need to continue to offer service — even while you’re stuck waiting for payment from previous jobs. Factoring your invoices allows you to turn unpaid invoices into assets, meaning you can continue to deliver service to customers who have not yet paid.
You might be wondering whether the process of factoring your freight bills is complicated. The truth is that the process couldn’t be any easier. With the right partner, you can:
• Qualify quickly without application fees
• Receive cash in as few as 24 hours
• Submit your invoices from the office or from the road – as most factors fund from invoice copies
• Monitor your account 24/7online
Factoring allows trucking company owners to monetize unpaid invoices, rather than waiting months for payment. The factoring company traditionally offers85-95% of the value of an invoice (less a nominal factoring fee) as an advance, while some companies such as Accutrac Capital offer upwards of 97%. The remaining amount is held in reserve and is remitted once the customer pays what they owe in full.
Freight factoring allows trucking companies of all sizes to continue working at peak capacity even though they have outstanding invoices on hand. Receiving advance payment on your invoices allows you to:
• Increase cash flow
• Secure cash on hand for overhead needs
• Take on more jobs and haul more loads — even from larger, slower paying customers
• Make prompt payments to your staff
• Pay your suppliers in a timely manner
• Keep your fleet operational
Few companies can afford to wait months to receive payment on a job already completed, which is why so many trucking companies use freight factoring as part of their weekly financial toolkit. If you run a trucking company of any size, consider factoring your invoices to inject some vitality into your cash flow.