Do you own or manage a small trucking company?
If so, you’re undoubtedly familiar with the ins and outs of freight delivery. You’re probably also aware that often, it can take an extended amount of time for your truckers to be paid for hauls they’ve already delivered.
It can take up to a month or more for payment to come in from customers. Meanwhile, your truckers are growing frustrated, your cash supplies are dwindling, and keeping your fleet on the road is becoming more difficult to profitably maintain by the hour.
That’s where we come in.
Our invoice factoring services make it easier than ever to secure the capital you need to keep operations going, boost driver morale, and ensure you meet time-sensitive deadlines.
Today, we’re discussing seven ways your company could benefit from invoice factoring services and how to get started today.
Ready to learn more? Let’s go!
What is Invoice Factoring?
Put simply, invoice factoring is a transaction in which a company essentially sells its invoices, or account receivables, to a third-party financing party.
In return, the factoring company expedites a portion (usually 80-90%) of the funds to the company so it can pay its bills and maintain adequate cash flow.
Then, the factoring company sends the invoice on to the customer and accepts payment.
So, just what are some of the benefits that this service can offer your trucking company? Let’s explore.
1. Grow Your Business, Not Your Debt
If you’re just starting out in the trucking industry, your first course of action may be to secure a bank loan or credit line to help manage expenses. While this is a popular route, it can lead to massive debt build-up that can be difficult to climb out of.
Alternatively, invoice factoring allows you access to quick cash that you don’t have to pay back, helping you budget more effectively and keep your financial stores in healthier shape.
2. Better Manage Expected and Surprise Expenses
As a business owner, there are some expenses you can count on regularly, such as employee insurance premiums, gas costs, and routine truck maintenance.
Yet, there may be some charges that you’re not expecting. A truck may need new tires. You may hire a new employee to fill a rush demand and rack up training and onboarding costs.
In both situations, it helps to have access to quick and dependable cash flow to make sure you don’t get behind on payments. Factoring your invoices gives you that peace of mind.
3. Get Paid Quicker
Even if you set defined payment terms on your invoices, there’s no guarantee that your shipper, carrier or broker will adhere to them. That could leave you stranded with no incoming cash flow for months at a time.
As aforementioned, you’ll likely have routine, monthly expenses. If you don’t pay those bills off in time, you could be hit with significant late fees and damage your supplier relationships.
Leveraging invoice factoring helps to ensure that you see a faster return on your services. This way, you can rest assured that you won’t go through a financial drought at the time your business partners rely on you the most.
4. Facilitate Smoother Collections
Collecting on an invoice can be a complex process. You want payment as quickly as possible, but you don’t want to be too aggressive or pushy in your request.
To this end, most factoring companies include collections as part of their services. This is when it pays to invest in a top-notch company that can handle transactions like this with professionalism and class.
This helps you avoid any uncomfortable confrontations (especially with repeatedly late payers) and facilitates more professional business relationships.
5. Gain Access to State-of-the-Art Technology
Digital technology is poised to make a huge splash in the trucking industry, and it starts with digital payments.
Some of the most successful invoice factoring companies will work with trucking companies to facilitate the completion of digital paperwork, accessible via your computer or mobile device. This allows your truckers to submit evidence of successful delivery in mere seconds, quickening the payment process.
Other digital solutions include virtual accounts that allow you to log in at any time to check payment history and digitally submit any outstanding invoices. Before partnering with a factoring company, request information on how they’re utilizing the latest in digital technology to bring value to their customers.
6. Communicate with Trusted Professionals
As a business leader, you’ve got enough on your plate. Dealing with the invoicing process should be one less thing you have to manage.
When you partner with an invoice factoring company, you’re entering into a trusted business relationship. After all, you’re depending on this company to oversee some of your most confidential and proprietary files on record.
As such, it’s wise to partner with one dedicated solely to the trucking industry. While there are countless factoring companies available, choosing one in your niche market helps ensure that when any industry-specific inquiries or issues come up, your account manager understands and can help you through them.
7. Receive Discounts on Fuel and Tires
What are two of the most frequent and costly expenses on your budget? More than likely, it’s the gas in your trucks and the four wheels that keep them moving forward.
In addition to generating faster cash flow, most invoice factoring companies can also help you secure valuable deals on both fuel and tires. In addition, you could also be eligible to participate in fuel credit lines and receive special equipment financing offers.
These are offered as incentives for your business, and it’s smart to take your factoring company up on them. After all, the goal of a factoring company is to help you manage your income. What better way to do that than by saving money on the costs you already rack up?
Ready to Partner with a Factoring Company? Start Here!
Now that you know a little more about invoice factoring and its advantages in the trucking industry, are you ready to get started?
If so, we’d love to help.
We’re a freight matching and bidding marketplace dedicated to helping our customers in the trucking industry handle their business demands as efficiently as possible.
To learn a little more about what we do, check out some of our services.
Any questions? Feel free to contact us. We’d love to help you deliver and save!
