An uptick in consumer confidence bodes well for the fourth-quarter of 2019, and fleet owners can position themselves for growth in 2020. However, having access to working capital is going to be of the utmost importance, so maximizing cash flow will be a major focus for the end of the year and the start of the next.
Fleet Owners Need to Reduce Debt
To help maximize cash flow, fleet owners will need to reduce debt. Many fleet owners took out loans to overcome financial obstacles in 2019, and the balance needs to be repaid. Unfortunately, those monthly loan installments are eating up a good portion of the revenue. The first step is to consolidate any existing debt into one manageable loan with low interest rates. This will free up revenue that would otherwise go towards liabilities.
Take a Critical Look at Unnecessary Expenses
Fleet owners should regularly run expense reports to see how money is being spent. What may have seemed like a necessary and ongoing expense a year or two ago, may no longer be needed. The same with subscription-based services. By trimming down unnecessary expenses, fleet owners can put more revenue in their accounts while simultaneously lowering overhead. A few dollars every month may not seem like much, but over the course of years, they really add up.
Faster Turnaround on Receivables
In an ideal world, clients would pay immediately when shipments are delivered. Standard business practices dictate that receivables have staggered payment schedules of 30-plus days. This means fleet owners are waiting for a month or longer to receive payment from clients. This can place a big strain on cash flow and throw off internal payments on bills, loans, or payroll. Freight factoring changes all of that by turning unpaid receivables to cash within 24 hours. The process is simple and transparent, and there is no debt placed on the books. Freight factoring boosts cash flow to cover expenses and allows fleet owners to build up capital for equipment, growth, hiring, or anything else they need.
At Express Freight Finance, we provide the most comprehensive freight factoring services specifically designed for the trucking industry. Contact our offices and start improving your cash flow today.