If you find yourself waking up constantly at night, you may be putting yourself at risk on the road. Thousands of truck drivers suffer from sleep apnea. Without proper sleep, truck drivers are less likely to be able to focus on the road and more likely to get into accidents. How can you prevent this?
Owning a trucking factoring company is no easy task, and although owning and maintaining any sort of business enterprise is a challenging task in the extreme, a trucking company manages to provide the business owner with an even greater amount of logistical dilemmas and problems. While every business in the world will typically suffer from, and therefore need to protect itself against the dangers of poor cash flow, this is a problem that is especially acute within the trucking sector.
The reason for this is due to the fact that the freight company, by virtue of the design of the market that it finds itself in, will be required to have plenty of funds to hand in order to ensure that immediate debts and outstanding balances are settled in full and on time. While business expenses such as wages and rent can be delayed until the end of the month and centralized, other expenses such as the cost of fuel, repair of the vehicles and mechanical inspections will all require instant payment.
This means that the business owner of a freight company will need to ensure that they have sufficient levels of working capital available so as to ensure that these outstanding accounts can be paid as and when required.
However, this is not always an easy thing to maintain or achieve, and the reason for this is that many of the clients of a trucking company will usually be rather slow when it comes to the settling of their debts. The reason for this is due to the fact that the customers of freight companies are sales orientated retail outlets who will only make a profit when and if their stock has been delivered.
Therefore, this means that the trucking factoring company is effectively left hanging on, desperately waiting for some much needed money to trickle through. Because of these concerns, factoring for trucking companies has become a major business service, and with each passing day, there are even more service providers who are offering factoring for trucking companies.
One of the major benefits of factoring for freight companies is that the trucking company will be able to receive significant amounts of cash upfront, and in a short space of time. Rather than having to wait several months before they receive payment from their customers, the trucking company will instead receive the money in a few days from the factoring company.
Another benefit of factoring for trucking companies is that the factoring company will also assume total control and responsibility for the collection process, that is, the recovery of the money owed by the customer. Because it is a collection agency that is assuming control of the recovery of the debt, many customers will be more likely to pay upfront, as they wish to avoid the very real possibility that they end up in court by virtue of the fact that are a delinquent debtor.
The fees charged by these types of companies are extremely flexible and cost effective indeed
Truck and Freight Factoring
Small business owners and those who seek occupational independence face a hard road, to be certain. They are subject to the conditions of the marketplace, shifts in consumer preferences, employee behavior, and even in some cases to the weather. But while there are no guarantees, the freedom and the hope of significant financial rewards are an attractive lure for those equipped with the entrepreneurial spirit. The last thing that you need as you are seeking to grow and develop your own trucking business is to be left with a substantial log of unpaid receivables for the loads that you have delivered. Truck and freight factoring can help you to weather these storms successfully.
There are many different reasons – or excuses -a client might offer to explain away the failure to make a full or timely payment for the services that you took such great care to professionally render. Though these efforts may or may not serve to reduce your negative perception of a negligent payer, it is absolutely certain that they will do nothing to support your bottom line. Accumulating an excess of these deficits can cripple your trucking quickly, whether you are operating on your own or running a small fleet.
Ways that Factoring Can Help
The day to day expenses of long haul trucking is massive. Commercial trucks get poor gas mileage due to the size and weight of the loads that they must pull and which dramatically increase the gasoline intake requirements of a vehicle. Accordingly, fuel costs alone represent a daunting demand on corporate accounts. Adding truck maintenance and driver sustenance into the mix makes the picture even more intimidating. With careful financial management and clients who uphold the contractually agreed upon terms of payment, these costs pose little threat to your viability.
Regrettably, even those clients who seem to be well organized and committed to protecting their reputation are often inclined to put your interests far on their own. can be advantageous for the following reasons:
•Immediate payment – a factoring company knows that you need access to the funds that you were expecting as soon as possible, so you receive payment with minimal hassle and delay
•Eliminates your responsibility – barring willful deception or misrepresentation, once a truck factoring agency takes on your unpaid invoices, you will typically not have to repay them if they struggle to recover the funds
•Allows you to focus – as an independent trucker, your time and energy are incredibly valuable commodities and having to expend them to track down and persuade nonpaying clients is inefficient at best
You must have realized that although it is quite easy to start your own trucking business, it is quite difficult to keep it running. You might have credit clients that pay their dues between 30 to 60 days, while on the other hand there might be fuel bills, drivers’ wages and other expenses that might need to be met on a daily basis. A long lasting solution would be to get a regular flow of cash, even while you extend credit to your clients.
The invoices method of raising money would be to approach a bank, to procure an open invoices. However, if you are a start-up trucking company, the bank might foresee a higher risk and might ask you for a larger collateral against the loan. You might also need to furnish the account statements of your company for the previous three years, which anyway would not be possible. The loan amount would also be a fixed amount that would need to be paid back within a set time, by way of fixed monthly installments. Hence, a bank loan could be accompanied with rigid conditions that would have to be met during and after the loan has been sanctioned. In case you do require an additional amount, then that too would be quite difficult since you might have to wait until the first loan had been cleared.
On the other hand, freight factoring involves companies that just ‘buy’ your credit invoices from you and, in turn, pay you the invoice amount within one to two days. These freight factoring companies retain a ‘factoring fee’, ranging from 1.5% to 5% as their service fee. This fee will depend on the credit rating of your client as perceived by your factoring company, the number of credit days that you have extended to your customer and the total volume of business that you can furnish to your factoring company. Essentially, this implies that you get your money immediately, even though you may have issued a credit invoice to your client. This will enable you to pay your fuel bills, your drivers’ wages and meet other expenses immediately rather than waiting for your payments to arrive.
These factoring companies can also take over the collection activities of your business. They can thus collect the payment from your client on the due date. This will free your mind from the tensions related to collections, and you will be able to focus your energy on increasing your sales rather than chasing outstanding payments. The advantage of freight factoring is thus multi-fold. You will not need to provide any collateral.
The amount that you receive will be directly proportional to your invoice value. There will not be any repayment schedule since the amount will be wired to your account after the factoring fees have been deducted. This method of finance will thus increase along with your business. You can also factor all or part of your invoices with the factoring company. You cannot only handle all your expenses immediately but can also take in new hauls, which otherwise would not have been possible due to lack of ready funds.
Using freight factoring services is a method for you to acquire the cash that you want for your trucking business to continue working. The excellent part of using this kind of system is that by using a dedicated freight factoring company you obtain the cash you require, without having to wait for the bills to be paid.
There is very a small waiting time involved, and you do not have to be anxious regarding having ideal credit the way you would if you were dealing with a bank. Previously to employing a company like this, there are some things that you require to be familiar with and certain things you require to do, to find the corporation that is good for you and your needs.
Ways to Find Out the Best Freight Factoring Services
First, you have to search on your favorite search engine, like on Google, for freight factoring companies that offer this kind of service for your type of business. You desire to look for freight factoring companies, invoice-factoring companies, and other combination of words that are appropriate. Select the keywords that you think it will assist you in finding the service you are looking for.
Next, you will desire to select more than just a few sites to review. Select just those sites that present contact information – like email and a phone number. You will also desire to see if the site has a frequently asked questions sections – this will answer some of your queries easily, without having to ask someone about them.
While you are analyzing, note any issues concerning that company that are significant to you. This will assist you to remove a large part of the companies until you find the one that you desire to work with.
Factors to Choose Freight Factoring Companies
Here are some aspects that you will have to pay attention to when choosing among more options for this type of service: how quick will they take the delivery of your currency and in what format – i.e. from check, direct deposit, or by some other means; what extra services does that corporation present; how much is the service expense; what type of businesses does the corporation serve; which statements will the corporation factor if you want to be able to select; how will bank loans and lines of credit influence funding your invoices and even what type of client service does the corporation offer and how they will treat your clientele.
All these are important and you need to know about them right from the start.
Other Factors to Find Best Freight Factoring Companies
You also desire to consider whether or not the freight factoring company requires a long-term contract. If you can keep away from a long-term contract, then it would be better to choose this type of service. This way, if you change your mind for any cause, or you simply desire to stop doing business with that company, you have the alternative of going to someone else.
Again, as you evaluate the info on these websites, note down any further questions you may have. Once you have finished your investigation, you can contact every one of these companies and have them answer your questions.
This will offer you a taste of what their client service is like. You need to make certain that your clientele is well served, and this will permit you to test the system.
Now it is time to begin weeding out the companies. Look at those issues that are most significant to you, as you want to select the company that most suits your requirements. There is no one-size-fits-all resolution here, so keep away from any companies that may deal you that way.
When you have chosen the company you desire, then it is time to contact them and have them set up your account. You have an alternative here – if the company has a website set up properly, you may visit the site and begin there, or, if they do not have a website, you can contact them directly. You’ll be able to ask them for their services and query them what info they need to start your account.
Take complete info from their executive and start your account to avail best freight factoring services – this can help your business more than you can realize, as having the right flow of cash is always important in this type of business.