This year, many trucking companies are trying to position themselves for growth or simply improve cash flow. Unfortunately, both goals are very challenging when trucking companies are waiting on payments for receivables issued in 2019.
Because of staggered payment schedules, trucking companies have outstanding receivables from December. If the receivables are on a 60- or 90-day schedule, they might be expecting payment from jobs going back to November and October.
Waiting on payment can create major lags in cash flow, preventing trucking companies from making any headway in 2020. In severe cases, the lag in cash flow could force trucking companies to take out loans just to make payroll and cover overhead expenses. The debt from those loans will further increase revenue as the year goes on.
One way to catch up on unpaid receivables and take care of unsettled client accounts is to use freight factoring. By using freight factoring, trucking companies can eliminate the lag in cash flow by turning outstanding receivables into cash. Freight factoring provides a steady and healthy cash flow and eliminates the need for loans in order to smooth over any gaps in revenue.
Additionally, freight factoring gets rid of headaches for the accounting department because outstanding invoices do not age out to collections. The entire process is fast and efficient, so trucking companies can access capital within a single business day.
Freight factoring is not a loan, so trucking companies can preserve their credit ratings and keep debt off the books. Trucking companies of all sizes, and even independent owner-operators, use freight factoring to maintain a healthy cash flow to cover overhead and grow their operations without the risk associated with traditional loans.
Make This Year a Successful One
Express Freight Finance provides factoring services to trucking companies throughout the United States. Whether you want to catch up on outstanding receivables or get a faster turnaround as shipments are delivered, we can help. We will convert receivables to cash within 24 hours so you can improve your cash flow and build up reserves for growth. Contact Express Freight Finance today to get started.