Most
trucking companies understand the importance of prompt payment from clients to
progress in the business. But, in most situations, the invoices are paid late
and even delayed for more than 30days. This leaves the company in a tight spot
which at a time delays some important shipments. The trucking business demands
regular cash to make
payments to
the drivers, repairing and breakdown expenses, and fuel charges. Inadequacy of
funds might hurt the smooth functioning of the business.
However,
this problem is solved with the introduction of freight bill factoring. Freight
factoring helps in maintaining a steady flow of cash without thinking about the
late payments from the client. They provide cash against all the outstanding
accounts receivable held within a day itself. Hence, with steady cash flows,
one can make the driver payment on time as well as tackle the repairing and gas
expenses.
The entire
procedure of freight factoring is very straightforward. First of all, you get
the freight bill after the completion of the shipment. Then these bills are
presented to the Freight billfactoring company which pays an installment amount of
around 90% of the invoice value. These companies make the payment to their
customers almost immediately while they need to wait till the due date for the
actual payments.
Once the
company gets paid up, the remaining fees are even extended in the form of a
second installment. The factoring rates vary depending on the transaction duration,
volume, invoice amount, and credibility of the customers.
What are the benefits of trucking factoring?
The trucking factor comes
with great financial assistance to the business owner. They help in the
following ways,
- It
helps to fetch instant cash facility rather than waiting till the due date of
invoice.
- It
helps to completely focus on the business rather than worrying about the
payments from clients. The responsibility of collecting the payments gets
transferred to the factoring company.
- It
provides a good opportunity for all the new companies to fetch financial
assistance in comparison to the bank loan.
So, with the
minimum paperwork and all the unnecessary procedures ignored, grab the benefits
of engaging with the factoring company.
