If you don’t happen to be an expert on financing in the trucking industry, don’t feel too left out — not many are. But if you own an American trucking company, it pays to brush up on the facts. One major financing option that has become more mainstream in recent years is factoring, a term not taught in every business school. Most wouldn’t think about factoring as a concept unless they routinely dealt with slow paying customers, who often take 30 to 60 or even 90 days to pay on their outstanding invoices.
Factoring might not be a term everyone is familiar with, but it’s an essential part of the American economy, and takes place in almost every industry in the country. Freight factoring — a form of invoice factoring — is used by trucking companies to help deal with cash flow issues and customers who take too much time to pay for services already rendered.
Many small- to medium-sized trucking companies deal with the daily hurdle of cash flow freeze outs, wasting time tracking down customers to collect on unpaid accounts receivable, as well as keeping up with emerging technologies — all of which can slow down daily operations, and keep businesses from running efficiently.
While factoring may also be a term from your freshman math class, in the transportation industry, trucking factoring means one thing — getting paid immediately.Simply put — factoring is the selling of unpaid invoices at a discount price.
Factoring companies help thousands of truckers across the country manage their finances while offering upfront funding solutions — just check out this blog to see the latest financial tips for truck drivers and owners and how they go along way toward keeping businesses in the trucking industry solvent.
The first big advantage to factoring is that it gives businesses access to the funding they need, as opposed to waiting for their slow paying customers to finally pay for an expensive job that the carrier has already delivered on.
Another secondary advantage is that the factoring company takes over the responsibility for collections, which frees up carriers to focus on what really matters in their business — following up leads and securing new business. After all, what carrier wants to waste their time tracking down unpaid invoices when they could be growing their company?
If you operate a trucking company large or small, freight factoring could be the solution you need to take your business to the next step. Not every startup can experience miraculous growth without help, so it pays to remember that finding the right factoring company not only allows you to meet necessary day-to-day expenses, organize your accounts receivable, and concentrate on growing your business rather than collecting from past customers, but it also comes with a number of value-added secondary benefits.
The best factoring companies, such as Accutrac Capital, offer value-added benefits such as accounts receivable management and risk mitigation through commercial credit checks of current and prospective clients on your behalf. This service puts you in a position to offer strategic terms, choosing to work only with customers that have a very low chance of defaulting on their invoices.
If securing funding when you need it rather than waiting months for slow paying customers is a service you would be interested in, consider partnering with a freight factoring company that offers generous cash advances on top of numerous value-added benefits. Find the right partner today.