Factoring companies are essential for small businesses in bridging the gaps of invoice payments with an upfront payment of up to 90% of the original invoice. When choosing from the top transportation factoring companies, wouldn’t you pick the one that allows you to manage your cash flow with ease and helps you stay on track with your finances without making you wait for weeks?
Sudden and immediate cash flow requirements often affect both freight and transportation companies. With the increasing prices of fuel, these businesses’ daily costs of operation can be pretty high. If you’re one of these companies, how do you cope with these factors if you often wait several weeks for your customers to pay their invoices?
Still not sure how fast invoice factoring services go beyond helping you with your immediate needs? Read on to discover how factoring financing can assist you in meeting your short-term as well as long-term goals.
What is Transportation Factoring?
One of the best solutions you can opt for is factoring. A type of accounts receivable financing, invoice factoring can help your business by converting your outstanding invoices due within 90 days into quick cash that you can immediately use for your small business.
With transportation factoring, the companies of almost 12 million trucks, locomotives, rail cars, and vessels that move goods over the transportation network can sell the value of their customer invoices to a factoring service company and get immediate cash up to 90% of the invoice value that they can use for their daily operational expenses. The factoring company that paid you for the invoice will now be the one to collect the payment from your customer. They will send you the rest of the amount minus their fees once your customer pays the invoice.
How To Make the Most Out of Transportation Factoring
Emergency repairs, maintenance, rising fuel costs, and sluggish customer payments make it essential for the transportation industry to have a steady cash flow. How will your company make money if you don’t have enough cash flow to offset these factors? When your trucks are not able to hit the road, transport and deliveries are put on hold, making it impossible for your company to earn any revenue.
Factoring can remove the guesswork that you often face when you have to wait for customers to pay their invoices. As soon as you transport a load, you can rest assured that you’ll quickly have the cash to cover operational costs.
To make the most out of factoring, you should keep the following things in mind:
- You shouldn’t prioritize customer invoices that take too long before payment is complete. For a steady flow of cash, factor invoices of customers that pay much faster. You also won’t have to pay higher fees that come with slower paying customers’ invoices.
- As soon as you deliver the load, submit the invoice to the factoring company. You shouldn’t wait until an emergency calls for extra cash before you request funding.
- With the ever-evolving industry standards and requirements, companies have different operating hours and schedules. Make sure to choose a factoring company you can work with according to your schedule and needs.
What Services To Look For
When choosing a factory company, pick the one that offers a full suite of solutions. Also check if they have excellent service, including the following:
- Offers quick, same-day funding without making you undergo an excruciatingly long onboarding process
- Helps you with sorting the paperwork, as well as the collection and invoicing tasks
- Provides a fuel card program where you can get significant savings at over 1,800 stations nationwide
- Does not charge you with invoice upload, minimum volume, and other hidden fees
- Provides back-office support so youand#39;ll spend less time tracking customers for previous months’ invoices
- Offers 24/7 customer business reports and credit checks on their web portal
- Gives you real-time feedback and status reports on your payments
- Allows quick and easy invoice uploads
Improve Your Business With Invoice Funding Companies
Whatever cash flow challenge your transportation company is facing, it’s a smart move to get factoring financing to make sure that your trucks and other motor vehicles can get out on the road. You not only remove the stress and worry about not having enough cash flow, but you’ll also boost your business by letting it run smoothly without unnecessary halts.