How To Use Truck Factoring To Improve Your Cash Flow

Creating a system and maintaining a healthy cash flow is paramount within trucking. Every load successfully delivered, every long mile completed presents an opportunity for growth. However, the reality for many truck owners is waiting for payment on invoices. This is where invoice factoring becomes the game-changer.

The steps on how to utilize truck factoring are outlined below.

Step 1: Partner Up with a Reliable Factoring Company

The first pit stop on your journey to improving your cash is finding the right factoring partner. Look for a factoring company that specializes in transportation. Check their track record, read reviews, ask questions. You want a partner that is responsive, transparent, and committed to truly helping you succeed.

Step 2: Submit Your Invoices and Get Paid Fast

Once you have found your factoring partner, it’s time to submit your invoice. After the factor has received your invoice, they will advance you a percentage of the invoice value — up to 98% within a few hours sometimes longer.

Step 3: Keep on Truckin’ While the Factoring Company Does the Heavy Lifting

With your advanced funds, you can keep your business moving forward. Meanwhile, the factoring company takes care of collecting payments from your customers. The factor does the chasing of overdue invoices. You focus on hauling loads, and they’ll handle the rest.

Step 4: Receive the Remaining Balance, Minus Fees

Once your customers pay their invoices, the factoring company releases the remaining balance to you, minus their fees. Factoring fees vary on depending factors such as:

Volume and Invoice Size
Industry Trends
Customer Payment Terms

These are a small price to pay for the convenience and peace of mind that factoring provides.

Step 5: Rinse and Repeat

Keep submitting invoices, keep getting paid, and keep your business running like a well-oiled machine.

Why Invoice Factoring Rocks

Instant Gratification: With invoice factoring, you get instant access to cash.
Smooth Sailing: Cash flow waves can be unpredictable. No more white-knuckling it through peaks and valleys.
Hands-Free Handling: Say goodbye to chasing paper and administrative tasks.

Tips to Maximizing Cash Flow Advantage

Keep Your Finances Organized: Keeping track of your finances and knowing your spending will allow you to prepare. Trackin’ Assets is a great tool to help you keep your finances in control.
Stay on Top of Your Invoices: The faster you submit your invoices, the faster you get paid.
Use Factoring as a Strategic Tool: Truck factoring should NEVER be used to plug holes in your cash flow. Truck factoring is used as a tool for growth. Use the cash you receive to invest in your business, expand your fleet, or take advantage of new opportunities.

Using truck factoring for its intended purpose paves way for a more successful and smoother journey to expanding your business.