4 Ways To Increase Your Cash Flow For Your Trucking Company
Updated: Nov 24, 2020
When running your trucking business, the daily operations, payroll, fuel, and maintenance issues all require immediate access to working capital. Due to late payments from freight brokers and shippers, and unforeseen expenses, cash flow can often run low.
All trucking business owners hope to be profitable, but it is difficult to sustain profitability without having consistent cash flow. Whether you're starting a trucking company or have been in the trucking industry for years, use these 4 ways to increase cash flow for your trucking company.
Freight factor your invoices
Many trucking businesses work with a freight factoring company to factor freight bills. Freight factoring, also known as accounts receivable financing, provides truck drivers with access to consistent cash flow for their company. Trucking factoring eliminates cash flow problems by paying its clients in 24 hours, instead of the typical 30 to 90 day period it would take them to get paid when they haul a load. A freight factor purchases your unpaid invoices and advances you the cash immediately.
Use a fuel card for your trucking business
Fuel is one of the biggest expenses that a truck driver will have. The best fuel cards will provide you with savings on the gallon at major chains and smaller locations across the country. When you work with a factoring company like Porter, you will get a fuel card for free. Most factors also provide clients with fuel advances on their fuel card. Using a fuel card will save you thousands of dollars over the year, which will then increase your cash flow.
Credit check your clients
It is not uncommon for a freight broker or shipper to go out of business, leaving thousands of dollars in unpaid invoices. If you do not work with a middle man like a factoring company, and your client goes out of business, you take the hit of not getting paid. If you sign up for a non-recourse factoring agreement, you would never take the hit if a broker or shipper went out of business. It is important to check all brokers and shippers credit scores that you want to work with, to avoid working with bad debtors.
Stay on top of all your expenses
There are multiple fixed costs when running a trucking company. Owner operators understand their day to day operations include making sure all their expenses are taken care of. It is also important to cut unnecessary expenses to increase cash flow. Can you outsource your back-office paperwork with a factoring company and cut costs on payroll? Do you have the best insurance rate for your trucking company? Look into all your expenses to see what you can cut, what takes days for you to pay, and what you can afford.
Porter Billing Services works with trucking companies to provide them with consistent cash flow, increase their working capital, and grow their trucking business through freight factoring services. For more information on how we can help you achieve your trucking goals, apply now or call us today at (205) 397-0934!