We are still in the middle of winter, which means oil and gas distributors are supplying gas stations, private individuals, and more with the fuel necessary to keep vehicles moving and houses warm. However, staggered payment schedules may mean that oil and gas distribution fleets of all sizes may not see revenue from winter sales until mid-spring. So how can downmarket fleet owners improve cash flow to see them through the first quarter?
Staggered Schedules and Distribution Fleets
One of the biggest obstacles to distribution fleets in the oil and gas industry is revenue. Far too often, revenue is tied up in receivables that on staggered payment scheduled. This means that any sales and deliveries might not see payment for 30, 60, or even 90 days. The lag in revenue can place a major strain on cash flow, especially during the winter months, when the demand for oil and gas is particularly high. Without a healthy positive cash flow, distribution fleets may be unable to cover overhead expenses, make payroll, or even order shipment upmarket. While some distribution fleets turn to short-term loans to overcome recurring gaps in revenue, there is a simpler solution.
Factoring for Oil and Gas Distribution Fleets
Factoring receivables for oil and gas distribution fleets removes the waiting time between payments. Invoices can be submitted for factoring as they are generated, and the time between submission and access to cash is 24 hours. Factoring unlocks the revenue that’s tied up in receivables and boosts cash flow so oil and gas distribution fleets can keep moving without worrying about finances. Best of all, factoring reduces the need for short term loans to smooth out uneven revenue cycles caused by staggered payment schedules.
At Express Freight Finance, we provide factoring services to every sector of the trucking industry. Whether your oil and gas distribution fleet delivers directly to customers, or you serve other businesses upmarket, we can help ensure a healthy cash flow. Our team will work with you to create a factoring solution to fit your needs – whether you want to speed up revenue, smooth our revenue cycles, or position your company for growth. Contact Express Freight Finance today to get started.