Freight factoring is a means for truckers to be paid immediately for the work they have done whether or not the shipper they are working for pays on time. Many trucking companies rely on freight factoring because even in good economic times they cannot afford for their invoices to go unpaid for 30 to 45 days or more.
As a trucking company, you have a number of immediate, short-term financial obligations including driver payroll, fuel expense and truck maintenance. These expenses must be paid quickly, but your customers may wait to pay you. In order to improve your cash flow you need a financial solution that increases your cash without increasing your debt.
Freight factoring offers a variable and flexible alternative to a traditional loan. Keeping a healthy important thing involves timely payment of the bills. Make sure you invest in software or techniques that may automate the process for you. At a minimum this software needs spreadsheets that you’ll be able to format and design to meet your needs. It’s also advisable to have the ability to produce, track and manage your invoicing using this system. Once you are capable to electronically store and manage the flow of your invoices, you can then concentrate on the efficiency and productivity of the staff.
This financial tool can greatly improve your cash flow without tying you up with monthly installments over a fixed period. By taking over your collection activity, it can also reduce your stress levels and impart a level of professionalism in your business. Hence, freight factoring is more in tune with your business needs as compared to a traditional loan.