Since July 2018, more than 64% of carriers that arranged freight through our full-truckload brokerage documented a relationship with a trucking factoring company. Between July 2017 and June 2018, only 59% of carriers reported a relationship with a factoring company. This represents a 8.5% increase in one year. This method of handling accounts receivables has gained popularity in recent years, especially among long-haul trucking companies.
Why are more trucking companies utilizing a factoring company’s service? Here are four reasons:
Save Time Processing Payments
As a business owner, the value of diversifying your customer base is important to combat the seasonality and cyclical nature of freight. This wise business practice has a downside. Dozens of payment sources mean dozens of different processes that a carrier must abide by to properly receive payment for their hard work. With a trucking factoring company, you establish one source and a single relationship to receive your payment from. The process is consistent, along with your cash flow.
Avoid Stress of Customers Not Paying
The credit worthiness of your customer can determine when and if you will be paid for your work. It is best to avoid fly-by-night companies or any entity that is on their way out of business. The amount of time you wait to be paid is often determined by the financial strength of your customer. A solid trucking factoring company will frequently check the credit of your customers. A great factoring company will provide you with a credit check tool. You can then vet any potential or existing customer at your convenience.
Get Cash Fast to Pay Bills
Driving and managing tractors and trailers necessitates immediate expenses. Fuel prices can be combatted with a good fuel program like England Carrier Services Fuel Card but still need to be paid to transport freight. Tire replacements due to blowouts or worn tread can occur in 18 different positions on a single rig. This is an expense that amounts to thousands of dollars at a time in most cases but, again, can be combatted via England Carrier Services Tire Program. And our trucking factoring services can help you keep cash coming into your account to tackle these problems.
Access Up-to-Date Business Data
Every invoice submission to a good factoring company is input to an interactive, web-based platform. England Carrier Services provides access to a web portal where invoice, rate confirmation and Bill of Lading data and images are available for reference. Our clients can review up-to-date data regarding their business with all of their customers. Various reports regarding your revenue and income are available when your factoring company is handling the data entry and is equipped with intuitive software programs.
When you work with a factoring company, they can keep payments flowing consistently, which saves you time and stress. This leaves you more time to gather new business and keep current customers engaged and happy. If you haven’t looked into using factoring services for your company yet, you may find it’s the best thing you could do for your business.