If you are the owner of a trucking or transportation company, you understand that during times of economic uncertainty – such as the current financial entanglement the US is facing in 2018 – it pays to maintain positive cash flow to keep your trucking company sustainable and to prepare for future opportunities. For most US trucking companies, however, maintaining solid cash flow typically involves a commercial operating line of credit or a loan from a bank or other traditional lender. But the restrictive policies employed by banks often prevent trucking companies from qualifying for most commercial loans, as the industry is considered to be fickle and high-risk.
If you are facing a cash flow crisis, streamlining your cash on hand through your Accounts Receivable is a major advantage that many US carriers large and small are beginning to incorporate as part of their overall financial toolkit. If your customers typically take 30 to 60 or even 90 days to pay on their invoices, freight factoring, also known as transportation factoring, is helpful because it allows you to secure your funds upfront by selling those invoices right away at a discount. Furthermore, the third-party factor that buys the invoices upfront and collects on them on your behalf is essentially freeing you up to focus your time and energy on more important elements such as growth.
Value Added Services Count
Top factoring companies such as Accutrac Capital, for example, offerprofessional AR managementand total plan transparency as a basic foundation of any of their transactions, but they will also provide cost saving value-added services including:
• Discount Fuel Cards
• Cash Advance B4 Delivery
• Preferred Currency Exchange Rates
• Equipment Financing
Improved Customer Relations
Once upon a time it was believed that any carrier who factored their invoices was somehow a liability. But according to the experts at Accutrac, over the last 20 years, customers have begun to see things more clearly and they recognize that moving freight is the key to any carrier’s business. By logical extension, factoring invoices in order to keep cash on hand allows you to move freight faster and more reliably. Visit their blog to discover tips for your transportation company and to learn more about the convenience of factoring overall.
Furthermore, by factoring invoices, you don’t have to worry about turning down large hauling jobs simply because you’re worried about customers taking months to pay. Factoring invoices allows you to retain the cash on hand you need for day-to-day business expenses, while also giving you the freedom to take on bigger jobs. With up front cash through third-party transportation factoring, you’ll have the opportunity to build and expand your fleet and take on new contracts as you please.This is particularly true for transportation companies that offer extended credit terms.
The financial leverage afforded by invoice factoring is fast becoming a mainstream financial option for most US trucking companies, whether small, medium or large. Even the biggest fleets and enterprises experience periods in which their outgoing cash requirements exceed the money they have on hand, and transportation factoring is becoming the go-to solution. After all, when you let your factoring company monetize and revitalize your Accounts Receivable, you are focusing on other areas, such as customer relations, and growth, no longer worrying about past invoices, but instead focusing on the future.