Invoicing Solutions for Trucking Companies

More Trucking Companies Are Utilizing Invoice Factoring Than Ever

  • According to a recent American Transportation Research Institute (ATRI) report, the trucking industry continues to face a number of hurdles that affect their bottom line. While there were over a dozen cited challenges, the ATRI reported that while fuel costs and a sluggish economy top the list of headaches for owners, driver shortages and government regulation are also factoring into the rising challenges of doing business in an already tight industry. This has led a number of trucking company owners to rethink their financial strategy.

    More than ever, trucking and transportation companies are looking to freight bill factoring — which is a form of invoice factoring — to help boost their working capital needs. Whether your transportation company is a small one truck operation or a large nationwide fleet, partnering with an invoice factoring company is now becoming a ubiquitous financial strategy, and is less and less a concern to your trucking customers. As a conventional banking system continues to operate with stringent requirements for funding, invoice factoring has become a mainstream solution and allows you as a US carrier to stop worrying about cash flow problems and concentrate on bigger issues like growth and maintaining solid customer relations.

    How Factoring Benefits Your Customers

    Invoice factoring helps you improve your company’s cash flow, which is always a plus when dealing with any new customer. But factoring can also provide secondary effects to your customers. A professional, reputable factoring company may even improve your relationship with your customers’ A/R departments. Professionals in the accounts payable department are likely to be familiar with invoice factoring, and many of them appreciate working with the flexibility of a third-party factor.

    Every business in the trucking industry requires some form of financing — this is true of companies of any size at any stage of development. The question is which type of financing is right for your company. It’s important to note the transportation factoring is not a loan, as it won’t dilute equity. And because the trucking industry is fickle, many large financial institutions are hesitant to offer loans or lines of credit to owners. Your customers know that invoice factoring helps maintain positive cash flow and accelerates growth, which might help explain its growing popularity. Knowing that your business is secured healthy, ongoing financing signal strength and stability. Rather than being seen as a company that struggles day-to-day to manage its cash flow, your trucking company will be recognized as a financially viable business thanks to freight factoring.

    Freight factoring is the ideal solution for carriers who have to wait 30 to 60 or even 90 days for their clients to pay their invoices. Factoring is not a loan; it is instead the selling of invoices at a discounted exchange for immediate funding. Because any trucking company’s most valuable asset is its unpaid invoices, receiving cash on hand for them is a more financially savvy move then waiting months to receive payment on a load you’ve already delivered.

    The Right Kind of Factor

    Finding an industry-specific factoring company, such as Accutrac Capital, is advantageous because they understand the ins and outs of your industry, and they know the daily fiscal and operational hurdles you face each day. Other benefits of using a third-party factoring company as part of your financial toolkit include additional support services of free A/R management as well as access to credit search tools to mitigate risk as you take on new clients.

    With invoice factoring as one of many tools available to your trucking company, you will be able to maintain positive cash flow, and impress upon customers both old and new that you’re ready for any challenges you face on the road to prosperity.