From California to Florida, New York to WashingtonÉif a truck driver's life is anything, it's mobile. As the daily costs of keeping your trucks rolling come up, cash needs to be readily accessible when and where you need itÉwhether you own one truck or a fleet of trucks.
Here are four tips to keep the cash rolling to meet your needs.
Tip #1: Don't wait to the end of the month to invoice
As soon as you've completed a job, invoice for it. Waiting until month-end may sometimes seem like less administrative work, but it creates a real bottleneck for cash flow. For example: Let's say you have a customer with 30-day payment terms. If you finish a job on the 15th of the month and don't invoice it until the 30th, you've actually given your customer 45 days to pay.
If you're an owner-operator and can't get to invoicing because you're on the road, hire someone to do it for you. The benefits will outweigh the expense.
Tip #2: Have a solid plan for tracking and following up on receivables
This is an area where many trucking business owners in the US admit they fall down. Yet, it's a key factor to healthy cash flow (and a healthy bottom line). If you're one of those owners who thinks that reminding a customer about a late payment is being pushy, consider this. If you allow your customers to pay late without following up, you're actually training them that it's okay not to pay on time. Again, if it's not your strong suit, get help to put your receivables in order and keep them that way.
Tip #3: Consider factoring your invoices to improve cash flow
Even with the best planning, there will be times when cash flow comes up short. If a traditional business loan or line of credit isn't an option (or desirable), consider factoring your accounts receivable invoices to free up cash flow. As long as your trucking business deals with creditworthy customers, you can qualify for factoring. You'll then have access to cash within 24 hours of issuing your invoiceÉwhile the factoring company waits to be paid (and does the follow-up for you).
Tip #4: Use trucking fuel cards
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:
- 24/7 online access
- extensive security controls
- ability to control where drivers stop
- ability to set product, volume and dollar limits
- reports that allow you to analyze purchase patterns
- ability to calculate fuel taxes easily based on transaction data