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An Economy on the Rebound, and the Driver Shortage

Saturday, October 26, 2013

If you ask the experts, they’ll tell you that 2012 saw one of the best years in the trucking industry since the economic downturn of 2008/2009. Forecasters say that the economy will continue to rebound. Yet many trucking companies continue to struggle. Why?

Trucking companies have faced driver shortages for years. As they try to rebound along with the economy, the growing (and unmet) demand for qualified truck drivers is putting the brakes on many of them being able to seize the opportunities that the current economic upturn offers. That’s especially true for smaller trucking businesses.

A nationwide driver shortage

A recent article in CNNMoney said that 11 million Americans are unemployed, yet 4 million jobs remain unfilled. They continued to list the 10 most difficult jobs to fill. Number one was software developers. Number two was truck drivers.

A large pool of experienced drivers are getting ready to retire at a time when fewer young people are choosing to enter the field. Add to that an average long-haul driver turnover rate of 98% in 2012 and it’s easy to see why the continued shortage of drivers has trucking companies looking for creative ways to attract newcomers into the field.

Companies are recruiting right in the driving schools, often hiring candidates before they’ve even finished their courses. Many are sweetening the pot with higher wages and improved benefits. And, any smart trucking business owner is working hard at making his or her place of business simply a great place to work.

3 Tips for keeping drivers happy (and retaining them

Nothing beats a great place to work: Yes, you’ll need to compete in wages and benefits to attract new drivers. However, if money is the only enticement, you may attract drivers, but you won’t keep them. Even more than money, nothing keeps a driver loyal to your business than making it a great place to work. As an owner, look for ways to recognize your drivers for their work. Listen to them and make drivers feel like an important part of your company. And, ensure that they have the tools and resources they need to do their job effectively.

Keep your promises: However you slice it, a paycheck is a promise. It may seem obvious, but making sure that your drivers are paid accurately and on time is critical to keeping them. Cash flow management can be a tough balancing act for smaller trucking companies who are struggling simply to make payroll, let alone compete with the wages and benefits offered by larger companies. To make sure that you always make good on your payroll promise, have back-pocket plans in place for times of cash flow lows. That can include things like a business line of credit, factoring your freight bills, load advances or a factoring line of credit.

Trucking Fuel Cards: Fuel cards provide a secure and simple way for drivers to pay for fuel, repairs, scales, hotel rooms and other necessities, and to receive cash. For personal safety, they’re also a better option than asking drivers to carry large amounts of cash to cover expenses.

For more information about factoring your freight bills, load advances, a factoring line of credit and fuel cards for your US trucking business, visit www.accutraccapital.com.

Never Underestimate How Cash Flow Impacts Focus

Monday, October 21, 2013

Have you ever witnessed someone experience a panic attack? The heart palpitates and hands shake. Often the person becomes paralyzed with fear. Unfortunately, that also describes how many businesses and their owners react to an unexpected or prolonged cash flow crisis. At a time when focus on growth is exactly what owners need to turn their trucking businesses around, every waking minute is spent worrying about cash flow.

The US trucking and transportation industry is highly competitive and growing. Those business owners who have the focus and resources to seize opportunities as they present themselves stand the best chance of reaping the rewards.

If your trucking business is struggling, or not meeting your goals, it’s time to conduct a focus check. Where is your time, energy and focus spent? If cash flow problems are robbing you of your ability to focus on growing your trucking business and creating new opportunities for revenue, it’s time to regroup and refocus.

Understand, we’re not suggesting that you ignore cash flow. On the contrary. Do what’s necessary to put a leash on your cash flow problems so that you can concentrate on growing your business.

Give the job to a professional

If you’re still the one who’s following up on receivables, managing cash flow and wearing the dozen other hats in your business, it’s time to give the cash flow job to the professionals. Some options include:

  • utilizing an accountant to budget cash flow and recommend processes
  • having a designated in-house professional to manage and follow up on receivables
  • hiring a professional receivables management firm to do the job for you
  • taking advantage of factoring which includes performing the back office receivables work for you

Whichever option works best for your trucking company, you’ll find that the faster turnaround of receivables and decreased bad debt can more than pay for the investment.

Give your cash flow some CPR

If traditional financing isn’t possible or something you want to incur, consider factoring your trucking invoices to create cash flow. It’s a simple process often used as a temporary financing solution by many trucking businesses to provide immediate cash until they can turn their balance sheets around.

For some trucking companies, factoring becomes their way of doing business because of the benefits they realize:

  • cash flow becomes predictable and immediately accessible
  • the factoring company conducts all credit checks and follows up on receivables reducing their back-office costs
  • they see a sizable decrease in bad debt
  • they now have the cash flow to take advantage of early payment and bulk purchase discounts

Getting your cash flow under control allows you to place focus where it belongs…growing your trucking business and finding new sources or revenue.

For more information about factoring for your US trucking, freight and transportation business, visit www.accutraccapital.com.

Take Back Control of Your Trucking Business’s Cash Flow

Wednesday, October 16, 2013

We all love our customers. They’re the reason we’re in business in the first place. But, who decides how the cash will flow in your trucking business…you or your customers? Too often, customers demand extended payment terms. And, we let them…because, well, they’re great customers and we don’t want to lose them.

Even if your customers have negotiated to pay you in 30, 45, 60 or 90 days, you can still take back control of your cash flow. Here’s how…

Factoring your trucking invoices to control cash flow

When you choose to factor your accounts receivable invoices and freight bills, you are no longer at the mercy of your customers’ payment terms. Factoring provides you immediate access to cash flow; as soon as you deliver your load and submit an invoice. And, because factoring doesn’t create debt, it doesn’t impact your trucking business’s balance sheet.

What is factoring?

Factoring is a form of alternative financing that involves selling your invoices and freight bills to a factoring company at a discount in exchange for immediate cash. It’s easier and faster to obtain than a bank loan because qualification is based on the creditworthiness of your customers; not yours. Once you’re set up with a factoring agreement, it’s as simple as: deliver a load, submit an invoice and receive up to 95% of the invoice amount in cash…usually within 24 hours.

Manage factoring to control cash flow the way you want to

There are many factoring options available to you that can be customized to allow you to control cash flow…the way you want to.

  • Factoring only selected invoices: Just have a few big-ticket jobs where the related cash flow could make or break your business’s ability to thrive? You can cherry pick those invoices you’d like to factor. This is typically the most expensive form of factoring.
  • Factoring all invoices: Perhaps you’re tired of the guessing game of when you’ll finally get paid. Submit all your invoices from creditworthy customers for factoring and sleep well at night knowing that the cash will be there…predictable, accessible and dependable.
  • A factoring line of credit: You like the idea of the steady access to cash, but want to control when you draw upon it. A factoring line of credit* works like a business line of credit with the available funds equal to your total outstanding invoices that you’ve factored. You only draw funds as you need them, thus only paying factoring fees on the funds drawn.

Types of factoring

There are a variety of factoring products to choose from with different tolerances for risk and fee structures. A reputable factoring company will walk you through the process and the benefits of each product to identify what best meets your needs and goals. Types of factoring products include:

For more information about customized factoring solutions to help you take back control of your US trucking business’s cash flow, visit www.accutraccapital.com.

*A factoring line of credit is an alternative financing product exclusive to Accutrac Capital.

You’ve Had a Tough Year and the Bank Won’t Extend Credit. What Now?

Friday, October 11, 2013

There are lots of reasons why a trucking business may go through a tough year:

  • the loss of a major contract
  • an aggressive competitor
  • excessive receivables resulting in bad debt
  • the loss of partners or key employees

A steady and predictable stream of cash flow is the lifeblood that keeps your trucking business’s heart pumping. Unfortunately, the times when you need financing most are often the times when traditional lenders, like banks, refuse to extend credit.

You can trim back expenses and staffing to improve cash flow (and most likely will), but take care not to take your trucking business to the point where it can no longer grow. The best scenario to see you through these times of cash flow crisis is to find enough financing to generate sufficient funds to let you grow your business while controlling your costs.

But the bank has already turned you down. Now what?

You may think that because your trucking business has been refused credit by the banks, there’s nowhere else to go. There are alternative forms of financing available to your trucking business offered by factoring companies. They’re solutions that:

  • won’t create or increase your debt
  • are available even if you don’t qualify for traditional financing
  • are easier to acquire than traditional financing
  • provide funds quickly
  • are designed specifically for the trucking, freight and transportation industry

Low Cost Factoring

Low Cost Factoring is an inexpensive form of factoring ideally suited for the transportation industry. All forms of factoring involve selling your trucking invoices and freight bills to a factoring company at a discount in exchange for immediate cash. However, some suppliers provide simple to understand products that are easy to manage, while others do not. Be careful to select a factoring company that understands the trucking industry and provides services that will work for you.

When searching for low cost factoring, look for a factoring company that understands trucking and offers the following features:

  • Same day funding
  • Up to 100% advance
  • Industry low rates
  • No originals required
  • No monthly minimums

Trucking Load Advances

Can’t wait until you’ve delivered your load and created an invoice? Load Advances are offered by factoring companies that specialize in the trucking and transportation industry, like Accutrac Capital. Here’s how they work:

  • Once your driver picks up freight, submit your load confirmation to the factoring company.
  • The factoring company advances you up to 50% of the contract amount.
  • You deliver the load to your customer and submit an invoice.
  • The factoring company receives payment from your customer.
  • The factoring company pays you the profit (invoice amount, minus amount of Load Advance and a small fee).

For more information about trucking load advances and flat fee, ‘all in’ factoring for your US trucking and transportation business, visit www.accutraccapital.com.

3 Solutions to Help Struggling Trucking Companies Control Costs

Sunday, October 06, 2013

If your US trucking company is struggling with cash flow, keeping your costs under control is crucial. So is finding creative ways to generate cash flow to cover your costs.

Solutions that help you pay your expenses

Below are two products offered by factoring companies that can help you manage costs…and actually help you pay for them.

Trucking Load Advance: Delivering loads is your trucking company’s bread and butter. But you can’t invoice a customer until you deliver your load. And, typically you won’t get paid until 30, 60, sometimes 90 days after your customer receives their invoice. In the meantime, operating costs like fuel, maintenance, payroll and rent have to be paid. A trucking load advance provides you with up to 50% of your load’s contract value upfront to cover the costs of delivering your load, before you deliver it.

Fuel Cards: Fuel cards are a great way to reduce your costs by taking advantage of fuel and related discounts. It’s also a proven fact that you control expenses better when you track and analyze them. In addition to providing a secure and simple way for drivers to pay for fuel, repairs, scales, hotel rooms, receive cash and other necessities, fuel cards provide detailed information about spending activities and driver progress. Some of the benefits include:

  • secure online access…24 hours a day, 7 days a week
  • extensive security controls
  • the ability to control where your drivers stop
  • the ability to set product, volume and dollar limits
  • reports that analyze purchase patterns
  • easily calculate fuel taxes using transactional data

Currency Exchange Services

When you operate a cross-boarder trucking company or international logistics carrier, properly managing currency exchange can have a significant impact on your bottom line. Currency exchange services involve using transportation industry experts to monitor trends, set exchange rates and execute transactions on your behalf…saving you money, time and hassle.

For more information about carrier services that offer trucking load advances, fuel cards and currency exchange services for your US freight business, visit www.accutraccapital.com.

Your Struggling Trucking Company and Walking the Cash Flow Tightrope

Tuesday, October 01, 2013

Even with the recent increase in demand in the US trucking and transportation industry, many trucking businesses still struggle with cash flow. Customers are demanding longer payment terms at the same time that wages and operating expenses are increasing.

Keeping up with the demand on cash flow can be like balancing on a tightrope. Having a cash flow safety net to catch you when you fall is an important part of bringing your struggling trucking company’s cash flow back into balance.

Balancing on a cash flow tightrope

The first step in any balancing act involves finding your center of balance. For cash flow, that means knowing exactly where you stand today with cash flow…and predicting where you’ll be next week, next month, next quarter and at year-end.

Without taking the time to understand and predict your cash flow, you’ll constantly end up in crisis-response mode, making knee-jerk decisions when blind-sided by a sudden dip in cash flow. Take the time to work through your cash flow budget, and to review and adjust it regularly. That way, you’ll see the problem times coming, and be better prepared to ‘walk the wire’ until cash flow once again finds its balance. If you struggle with this, get professional help from an accountant or accounts receivable management firm. The benefits will far outweigh the expense.

Cast your cash flow net wide

Once you’ve completed your cash flow budget, you’ll see that it isn’t a matter of if your cash flow will trip and fall, it’s a matter of when. A well-planned safety net to help you through those cash flow lows will give you the funding and peace of mind to ensure that your trucking business continues to thrive and grow. What do we mean by a well-planned safety net? A cash flow safety net includes a variety of options to access cash flow when your trucking company needs it. These can include things like:

For more information about factoring your freight bills, load advances, a factoring line of credit and fuel cards for your US trucking business, visit www.accutraccapital.com.

Eliminate Receivables and Bad Debt in Your Trucking Business with Non-Recourse Factoring

Thursday, September 26, 2013

You’re working hard and landing lots of contracts. But there’s no money in the bank. Does this sound familiar for your US trucking business?

It’s a common story. It’s easy to let managing the collection process for your trucking business slide when business is hopping. Often it happens slowly. One month, you don’t get around to calling the customer who hasn’t paid yet. The next month, it’s two customers…then three. Before you know it, your accounts receivables are out of control and placing a strain on cash flow. It’s not that you have bad customers. You’ve checked them out and they’re all creditworthy. In reality, by not following up on late payments, you may be training them to pay you late.

If you’re looking for a solution that:

  • takes care of the back-office collection work for you
  • provides a cash advance of up to 95% of the invoice amount within 24 hours of issuing an invoice
  • absorbs the risk if your creditworthy customer doesn’t pay
  • eliminates bad debt

Consider non-recourse factoring for your trucking business.

What is non-recourse factoring?

Non-recourse factoring is a risk-free alternative financing product offered by factoring companies. It’s called non-recourse, because if your customer doesn’t pay, the factoring company absorbs the cost. Non-recourse factoring carries a higher cost than recourse factoring (where you retain the risk if a customer doesn’t pay). When deciding if non-recourse factoring is right for your trucking company, it’s important to balance the costs against:

  • what you’re losing by writing off bad debts each year
  • the costs of paying operating expenses with high-interest credit cards because you don’t have adequate cash flow
  • the administrative costs of managing your accounts receivable on your own
  • what you could save if you had the cash flow to utilize early payment or bulk purchase discounts from vendors
  • the business you’re turning away because you don’t feel you have the cash flow to deliver it

If you’d like a way to quickly turn your revenues into cash in the bank, without the risk of bad debt, consider non-recourse factoring for your freight bills and accounts receivable invoices.

For more information about non-recourse factoring to eliminate bad debt and receivables for your US trucking business, visit www.accutraccapital.com.

How to Create Cash Flow When Rebounding from a Tough Financial Year

Saturday, September 21, 2013

The loss of a major contract. A rough economic climate. A spike in operating costs. These are all factors that can lead a trucking company into a tough financial year. As you work to rebound from it, the strain on cash flow can cause some sleepless nights for any owner in the transportation business.

Often, you’ll need to acquire financing to see you through until you can get your books looking healthy again. Unfortunately, this tends to be the time when traditional lenders, like banks, don’t want to know you. When a less than desirable balance sheet means that bankers won’t return your calls, consider these alternative forms of financing to create your much-needed cash flow.

A Trucking Load Advance to help you accept more orders

It’s a Catch-22 problem. You need more orders to build your trucking business revenues back up to where they need to be. But you haven’t got the cash flow to cover the costs of delivering on those orders. Expenses like fuel, permits and payroll need to be paid now, not when your customer gets around to paying you.

A trucking Load Advance is an alternative form of financing offered by factoring companies. It provides you with up to 50% of the value of your load contract before you deliver it. Even though you don’t qualify for financing from your bank, you can still qualify for a Load Advance. That’s because qualification is based on the creditworthiness of your customers, not your business’s credit rating or financial history. And because the advance is paid quickly, you have the working capital you need to accept more orders and deliver more loads.

Factoring your freight bills to create accessible cash

When waiting 30, 60 or even 90 days to be paid just won’t cut it, consider factoring your freight bills and accounts receivable invoices to create ongoing, accessible cash.

What is factoring? Factoring is selling your accounts receivable invoices to a factoring company at a discount in exchange for immediate cash. And, like a Load Advance, you can qualify for factoring even if you don’t qualify for traditional financing…because it’s based on the creditworthiness of your customers. You get your funds advanced usually within 24 hours of issuing an invoice. Then the factoring company waits to be paid. In the meantime, you have the cash flow you need to keep your trucks on the road and to build your company back up to its profitable self.

Initially, it takes about two weeks to set up an agreement with a factoring company. Then, you have access to ready cash every time you issue an invoice to a creditworthy customer.

If you’re looking for ways to even out cash flow so that it’s dependable and easily accessible, ask a factoring company about combining a Load Advance with factoring the balance of the load’s contract value.

For more information about Load Advances and factoring to help your US trucking company rebound from a tough financial year, visit www.accutraccapital.com.

Walking the Fine Line of Cash Flow Survival

Wednesday, September 11, 2013

It’s called ‘cash flow’ because, when you’re in business, cash is never static. Like the tide, it comes in and then it goes out. Unlike the tide, however, it’s rarely as constant and dependable. Budgeting for and keeping a close eye on your cash flow can make the difference between surviving or being blind-sided by a sudden cash flow crisis.

Two vital cash flow metrics to watch are ‘collection days’ and ‘payment days’.

Collection days

‘Collection days’ (also known as ‘average days in receivables’) is a measure of how long it takes you to get paid. Understand that it’s not the same as payment terms that you offer your customers. It’s how long, on average, it takes for you to actual be paid.

For example, you may find that though you have 30 day terms for customers, in reality, due to some customers paying late, your actual ‘average days in receivables’ may be 35.

Why is this number important? It gives a more accurate picture of how long you should predict it takes to be paid when you’re budgeting and projecting cash flow. It’s also a number to keep a weathered-eye on. The lower this number is, the better your cash flow situation. Seeing a steady rise in your collection days means that you need to re-evaluate your accounts receivable processes to get it back in line.

Payment days

‘Payment days’ is a measure of how long you wait to pay your vendors. Of course, there are some expenses and payables that aren’t negotiable (payroll is due when it’s due, no matter what). You can, however, negotiate payment terms with your vendors, the same way that your customers negotiate them with you. Ideally, your vendor terms should complement the terms you offer so that, as much as possible, you’re not due to pay your vendors until after your customers have paid you. In practical application, however, they don’t always jive. Sometimes a customer will pay late.

If a customer does pay late and cash flow is a challenge, consider negotiating a later payment with vendors. This is an area where you want to walk a fine line. Having a strong (and friendly) working relationship built upfront with each vendor, makes it an easier ask. However, there may come a time when you need to call in a favor with a vendor to help you through a business challenge. If you become the company that always pays late, the chances of getting that favor granted diminishes substantially.

Factoring to improve your cash flow

Even with the best of planning, sometimes cash still comes up short. When cash flow is a challenge and you need a simple and fast solution, consider factoring your accounts receivable invoices and freight bills with a factoring company. It’s easier to obtain than a bank loan or traditional line of credit and you can get cash, usually within 24 hours of issuing an invoice.

For more information about factoring to create cash flow for your US trucking business, visit www.accutraccapital.com.

Your Business in Transition and the Cash Flow Crisis

Friday, September 06, 2013

Business transitions come in all shapes and sizes:

  • Trucking businesses going through restructuring
  • Bringing a new partner into your trucking company
  • The changeover of the ownership of a trucking business when an owner retires
  • Changing your customer market focus
  • Rebounding from a tough financial year

What do these varied business transitions have in common besides change? They all affect your trucking business’s demands on cash flow. That can include an increased demand for working capital to finance the change itself or a decrease in revenues as you adjust to the change. Often, it involves both.

Addressing cash flow issues during planned business transitions

Many of the transitions a trucking business faces are part and parcel of the growth and survival strategies to keep it healthy. In other words…they’re planned. Often US trucking businesses fail during times of transition because they spend all of their time planning the process, equipment and resource needs but precious little time considering how the transition is going to impact their cash flow.

Unplanned business transitions

There is a misconception that just because you don’t see an obstacle coming at your business, you can’t plan for it. While you might not always be able to predict the full impact of a sudden dip in market demand, for example, you still can have a back-pocket plan to provide cash flow in emergency situations. Any good business plan includes contingency planning. It’s a ‘what if?’ thought process where you list the things that could go wrong in your trucking business and then create a plan for what you’ll do when that happens. Part of that planning must include how you’ll deal with cash flow demands and shortages.

If you haven’t already performed your contingency planning for your business, it’s time to meet with your accountant, business coach or mentor to talk it through (and create your plan).

When planning for the ‘what if’ scenarios, be sure to have a clear plan on where you’ll go for cash flow. That can include solutions like:

For more information about factoring to provide cash flow to see your US trucking business through a transition, visit www.accutraccapital.com.