Too often truck company owners, despite setting payment terms, feel trapped by their customers’ failure to pay in a timely fashion. This can have a severe effect on your company’s cash flow and your ability to grow. Take back control of your trucking business’s cash flow by invoice factoring your accounts receivables and freight bills.
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 - Receivables Invoice Factoring (Invoice Discounting).
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. Accutrac Capital offers several types of factoring products including:
- Flat fee recourse factoring
- Flat fee non-recourse factoring
- Factoring line of credit*
- Flex Factoring