In every economy, transportation is a vital sector that enhances the production process. Trucking companies, however, face a number of challenges that slow down their overall production. Waiting for late payments from clients means that trucking companies do not always have the cash on hand they require to meet their day-to-day operation needs. This is why so many trucking companies are now turning to freight factoring to solve their cash flow issues. Factoring helps trucking companies because it allows them to turn their accounts receivable into upfront funds. When freight businesses or other trucking or transportation concerns are waiting for invoices to be paid but at the same time require the money for fuel, salaries, or maintenance, factoring becomes a beneficial option as it allows them to sell their outstanding invoices to a third-party factor and receive the funds often on the same day.
Freight factoring is helpful to any trucking company with cash flow issues due to clients who have longer payment terms. Your trucking business will usually receive payment within 24 to 48 hours from the factoring company — in this is because approval does not depend on your company’s credit worthiness but rather your customers credit history and the quality of the invoices that you are selling.
Factoring improves cash flow
If you are running low on funds, streamlining your cash flow through your Accounts Receivable becomes a major advantage, and part of a larger financial toolkit. If your clients take 30 or 60 or even 90 days to pay their invoices, freight factoring will be helpful because it allows you to secure up to 97% of the funds upfront. This allows the third-party factor to collect on the invoices for you while you focus on more important elements of your business.When you let your invoice factoring company handle your AR responsibilities, you are allotting your time as a business owner to growing and sustaining your trucking business.
An Opportunity to expand
By securing immediate funding, you will not only be able to meet your trucking expenses, but you will have the ability to haul more loads overall because you’ll never have to worry about not being able to meet your basic cash flow needs. Moving freight is the key to your business, and the more you move, the more you increase your bottom line. With cash on hand through third-party factoring of invoices, you’ll even have the opportunity to expand your fleet or take on new contracts.
Choose your plan carefully
With factoring from companies like Accutrac Capital, your trucking business can sell its invoices and receive payment up front based on a number customized plans. Accutrac allows you to choose between flat fee factoring (from 1.59% of the invoice value) or a factoring line of credit, a favourite of larger fleets, that costs as little as 0.022% per day. Another option includes flex factoring — designed for invoices that turn around within 10 days — costing you only 0.49%.
With the right factoring company, you can monetize your accounts receivable— gaining access to much-needed funding the day you apply. Keep your business running with a freight factoring plan that moves at the speed of your business.