With US economic experts anticipating a GDP growth rate increase next year, manufacturing is expected to increase faster than the general economy. Because of the strength of the US supply chain network, and because the Trump administration’s fiscal policies have helped bolster the manufacturing economy, overall growth and stimulation is predicted as manufacturing continues to increase.
But even in the strongest economic times, trucking companies need to have a robust financial toolbelt in order to help them stay cash flow positive. If you are wondering why an increasing number of trucking and transportation companies include freight factoring (also known as invoice factoring) as part of their toolbelt, the answer is that freight factoring opens the door to increased cash flow, fuels growth, and increases overall prosperity. In particular, factoring companies that specialize in trucking and freight transportation can give your company a custom-tailored boost to help you increase profitability.
When you’re trucking company operates at peak capacity, you enhance your profitability – that’s just a basic rule of business. With manpower, and liquid assets upfront to help you deliver your services, it’s easy to keep the numbers in the black. But when you need to wait 30, 60, or even 90 days for an invoice to be paid, it becomes more and more difficult to balance your finances. While you wait for that invoice to be paid, you still need cash upfront to pay for fuel, maintenance, payroll, and other overhead and day-to-day expenses that keep your fleet rolling.
If you want to reduce bills for your trucking company the right third-party factor will help you maintain positive cash flow. Here’s how it works: first, you deliver your load to your customer as normal, creating an invoice as you always do. As you send the customer their invoice, you also make a copy that goes to the factoring company. The factoring company purchases the invoice and deposits a cash advance (of up to 97%) on the invoice total (minus a small factoring fee) into your account within 24 hours — often in the same day. Once the end customer pays the invoice, the factoring company pays you the remaining 3% reserve balance.
Factoring companies that specialize in the trucking industry not only offer the ability to cash in on unpaid invoices at a discount, but they also offer a number of tools and strategies that will help you stay flush. When you own a trucking company, making sure you have fleet telematics is very important as it allows you to exchange information between central authority and commercial vehicles. The best factoring companies will provide cash advances on loans in transit as well as equipment financing to ensure that you maintain positive cash flow. Companies like Accutrac Capital for example also provide fuel discounts and preferred currency exchange as well as additional specialized services that will help you maximize your bottom line.
Accutrac offers simple document submissions as well as straightforward and easy-to-calculate factoring fees. Along with dedicated customer services and online account access 24/7, they also offer a 99.9% qualification rate — essentially, if you own a trucking company and you have credit-worthy customers, you are likely to be accepted. Unlike banks that only offer funding options based on the credit-worthiness of your company, a factoring company knows that it is dealing with invoices owed to you — and so only the credit of your customers matters. With the lowest factoring rates in the industry, trust a factor like Accutrac — one that understands the trucking industry inside and out.