The transportation industry often means delivering goods and services on a timeline and then waiting for your clients to pay on the invoices. This waiting period can be especially true for trucking companies of all sizes who are essential for getting daily necessities around the country. Whether you are an independent operator or a logistics company with dozens of trucks and drivers, you need to have the funding necessary for payroll, fuel and other bills on time, and factoring can help with that.
Faster Payment for Completed Loads
Factoring your accounts receivable as a trucking company means that you sell your invoices to a factor in exchange for a cash advance. In other words, you get a percentage of the invoice value in days, while your customers can have thirty to ninety days to pay the factor. Once your client has paid the bill, you will get the reserved funds minus a small fee for the service. This process lets you get paid quickly for the work you have done so you can pay your bills on time.
Easier Invoices and Collections
One good way to make money in the transportation industry is to have your truck and be self-employed. As your own boss, you can take loads for smaller businesses, contract with clients of your own, or even freelance with some of the big-name trucking and logistics companies. When you work with a factor for invoicing and collecting, you can spend more time making trips and less time asking clients to pay for the work done. You can also avoid the expenses and overhead of an office for your billing department without taking the time to do everything yourself.
Boosts Companies of Any Size
One of the most significant benefits of factoring for trucking is that companies of any size are boosted by using the service. Small businesses can get a cash advance to buy or repair a new truck or put more drivers on the road and take on more prominent clients. Large companies can choose how few or how many invoices to factor depending on cash flow needs or growth goals, and owner-operators can keep bills current to save capital instead of paying late fees.
Factoring can provide many benefits to those in the transportation industry, such as giving timely payment on invoices with thirty-to-ninety-day terms. The process can make billing and collecting on accounts easier for entrepreneurs and large corporations alike because the factor takes on that responsibility and lets you get back on the road more quickly.