Invoice payments can make or break both fleets and independent drivers. Having good customers who make timely payments on open invoices allows drivers and fleets to cover the cost of fuel and vehicle maintenance, and put some revenue into the bank account on top of it all. However, not all customers are the same, and invoice payments can have truckers and fleet owners waiting for a long time before they see any revenue.
Invoice Payments And Standard Business Practices
When invoices are issued, there is a payment window of 30, 60, 90 days or longer. This is a standard business practice in the trucking industry. In theory, the waiting period on invoice payments is to create a staggered schedule, while simultaneously giving customers the courtesy of not having to pay immediately for deliveries. The staggered payment schedule is supposed to provide a regular cash flow. The theory of payment windows does not always translate to reality. Invoice payments get delayed. In some cases, customer accounts get moved to collections, which adds even more time onto the payment window.
Sidestepping The Wait
Instead of waiting on invoice payments many fleets and independent drivers are using factoring services. On the back end, open invoices are processed within 24 hours, giving drivers and fleet owners access to the working capital they need to cover the cost of overhead and more. Factoring services also head off delinquent accounts. Because the invoice payments are processed immediately, customer accounts do not have the chance to age out. Factoring services can be used to clear out old customer accounts, as well as for new invoices. Factoring ensures that truckers and fleet owners maintain a healthy cash flow.
What Happens To The Customers?
Nothing changes from the customers’ point of view. They may see that their invoice payments involve factoring services, but the standards aging windows will still exist. For customers, everything is business as usual. For owner operators and fleets, factoring services can mean the different between accumulating growth capital, or having to tighten their belts to keep operations going.
Eliminate The Wait For Invoice Payments
If you want to speed up the rate at which you get revenue from customer invoices, contact Express Freight Finance. We specialize in factoring services for the trucking industry, providing payments within 24 hours, as well as a host of accounting tools and other benefits. Reach out to us today to learn more.