Uneven revenue cycles are nothing new in the trucking industry. Last year saw major gains for trucking companies of all sizes. While there are still gains projected for this year, they are not expected to reach the year-over-year highs as previous fiscal periods. Yet even with gains, many trucking companies are experiencing restricted cash flow and revenue that is lower in comparison to the total amount of receivables.
The Old Model Isn’t Working
It used to be that when a trucking company experienced an uneven revenue cycle, they’d use a short-term loan to smooth things over until the next period. Times have changed. Business is faster. Operations are more streamlined, especially for smaller carriers. Expansion plans are in place from gains in the previous year. Taking on unnecessary debt from short-term loans no longer fits into the picture. Trucking companies of all sizes need access to capital and to build up their cash reserves to handle payroll, expenses, and growth without becoming beholden to a bank.
Fixing Revenue Cycles at the Source
Uneven revenue cycles are rarely the fault of trucking companies. In fact, most cash flow issues can be tracked directly to unpaid receivables. Even though business in the trucking industry is much faster, everyone still issues invoices with staggered payment schedules of 30 days or longer. That is a standard business practice across all industries, and probably won’t change anytime soon. However, there is a way to improve cash flow so uneven revenue cycles are no longer a concern. Freight factoring is designed specifically for the trucking industry and turns unpaid receivables to cash within 24 hours. No debt. No hidden fees. No more staggered payment schedules. Trucking companies can improve cash flow, make payroll, cover overhead expenses, take advantage of growth opportunities, and remove the need for short-term loans to smooth out uneven revenue cycles. Freight factoring is a great way to build cash reserves and automate the accounting process as well.
Express Freight Finance is an industry leader in freight factoring and has been exclusively serving the trucking industry for years. If you want to stop worrying about uneven revenue cycles, or if you simply want to boost your cash flow and reduce your reliance on debt-based loans, contact the experts at Express Freight Finance today.