Transportation Factoring: Learn How Factoring Can Help Your Firm
Factoring is a great tool for businesses in all industries; however, the transportation industry has some unique challenges that factoring is especially good at addressing. Transportation factoring is a great way to boost your cash flow and keep your business running smoothly.
Cash flow is more important in trucking than it is in many other industries since rising fuel costs, unexpected repairs and slow paying customers can create the perfect storm to keep your trucks from hitting the road. It’s no secret that if your trucks aren’t on the road, you aren’t making any money.
How to Use Transportation Factoring Effectively
The whole idea with transportation factoring is that it takes the uncertainty out of your cash flow. When you have a factoring facility, you know that you will have cash as soon as you deliver a load. Your customer’s payment schedule suddenly becomes a much smaller issue.
There are a few things to keep in mind in order to get the most out of your transportation factoring facility.
- Many companies think that the way to address their cash flow problems is to factor the customers that take the longest to pay. That’s fine, but it’s not the most cost-effective way of improving your cash flow. If you factor your quicker-paying customer, you’ll have a steady stream of cash without paying the higher fees associated with slow-paying invoices.
- Submit invoices as soon as the load is delivered. The longer you wait to submit your invoices to the factor, the longer you are waiting for funding. Waiting until the last minute to request funding means that there is no margin in the event that something is off on one of your invoices.
- Finally, it’s important that you work with a factoring company that can accommodate your schedule. An online factoring company is perfect for this.
Why Online Factoring Is Such a Big Deal
Whether you’re a long-haul carrier on the road for days at a time, or a local carrier that’s out of the office most of the day, it’s difficult to deal with the administrative hassle of traditional factoring.
Many factoring companies require you to mail in original bills of lading at a minimum. You need financing that makes your life easier, not one that gives you extra work to do.
Online Factoring is Paperless
It’s rare that you find someone that actually enjoys doing paperwork. In today’s day and age, most paperwork is completely unnecessary. It’s just that most firms haven’t moved past the process that’s been in place for decades.
Online transportation factoring eliminates the need to push paper. Any documentation that’s required from you can be submitted electronically. After you’ve submitted everything electronically, then you can submit a funding request and receive a wire in your account automatically. After you’ve experienced online factoring, dealing with paper will feel medieval.
Online Factoring is Available 24 Hours A Day
Take care of your funding needs from anywhere you have an internet connection. You don’t have to wait to get back to the office to submit your invoices and request funding. When everything is handled online, you don’t have to waste time pushing paper in the office. Log into the online system, submit your invoices, and get back to doing what makes you money.
You don’t have to work around the transportation factoring company’s schedule. You are able to work on your schedule, even if it’s 2 in the morning.
Use Transportation Factoring to Get the Most Out of Your Business
The transportation industry is stressful enough without worrying about cash flow problems. It’s a smart move to establish a factoring line for your business. It gives you access to cash so that you can meet payroll, cover overhead and keep your trucks on the road. Having ready access to cash relieves much of the pressure that comes with running a transportation company.