Retail giant Wal-Mart has recently ramped up the pressure on its delivery scheduling, and they mean business. Any freight company that makes delivery outside of set times is likely to receive a fine. The new delivery schedule overhaul, called “On-time, In-full” seeks to add $1 billion in revenue through improved product availability at stores. Of course, for a trucking company operating in the US, this means that it is now more important than ever to deliver freight on time every time.
Keeping your fleet operational, and maintaining a healthy driver pool will be integral in 2018, as retailers continue to make more and more demands on the industry. Simply put, companies unable to stay in the black enough to meet their basic day to day operating expenses — and make their deliveries in a timely fashion — will suffer.
This is why so many professional trucking companies employ freight bill factoring, a form of invoice factoring that enables owner-operators of trucking companies to stop playing the waiting game and to get paid immediately for hauled loads by turning the invoices of slower-paying clients into immediate funds. Selling your invoices to a third-party factoring company will get you paid right away — often within 24 hours of delivery, rather than waiting 30 to 90 days.
Factoring freight bills frees up cash flow, and as every business owner knows, cash flow is the beating heart of any business. With banks often setting unmeetable conditions on their loans or lines of credit, small and start up trucking companies, and even established transportation businesses, need to rely on creative sources of funding to ensure enough money is on hand to take on new clients, operate the business, as well as maintain equipment and handle payroll.
Whether you have a massive fleet of trucks and a nationwide network, or a small team of drivers, a factoring company like Accutrac Capital can help you turn your outstanding invoices into a valuable resource. The process involves a few simple steps and starts with obtaining your factoring company’s approval for a particular customer (or account debtor) whose invoices you wish to sell. After you’ve completed the delivery, you supply the factoring company with the invoice documents and receive a direct deposit in the form of an advance (equalling up to 97% of the invoice value, less a small factoring fee that varies depending on the plan you choose). When the factor collects on the invoice, the remaining reserve balance is paid back to you.
Benefits of freight bill factoring include:
• Having immediate cash on hand to pay for overhead and operating costs.
• Having the financial support to take on new clients or higher-paying work, regardless of the turnaround on payment.
• Being able to grow or expand your business thanks to a virtually unlimited supply of up-front cash (so long as you keep making hauls).
• Reducing the amount of time spent invoicing and collecting on overdue payments.
Factoring companies are an excellent option for fleet and transportation companies that need easy-to-access, flexible financing or immediate cash to handle costs. With the right factoring partner, you can keep your business in the black, and rise to meet all the challenges of the trucking and transportation industry.