Even with the recent increase in demand in the 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. Protect your trucking company from cash shortages by creating a cash flow safety net. There are a variety of options to access cash flow such as invoice factoring (invoice discounting) your accounts receivable invoices and freight bills. Other strategies include; fuel cards and load advances.
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:
- creating cash reserves in months of cash flow excesses
- a business line of credit
- factoring your accounts receivable invoices and freight bills
- a factoring line of credit (an alternative financing product exclusive to Accutrac Capital)
- trucking load advances
- fuel cards