Waiting days to receive payment on customer invoices can create an unnecessary financial strain on any business, especially firms in the transportation or freighting industries. Toiling to pay shippers, suppliers, and other third parties immediately while experiencing long wait times for payment for services can hinder business growth, or even put a transportation or freight company completely out of business.
How to get Started
To be eligible for invoice factoring, your company must issue bill or invoices on terms not exceeding 60 days. Any company can submit their bills (not a just truck or freight companies) as long as they meet this requirement. Once you have some invoices that haven’t been paid yet, you send the freight bills and accounting receivables that you wish to receive cash for to a truck or freight factoring company.
Get Paid Fast
As soon as you have been approved (it’s usually a very short approval process; some companies qualify in as little as 24 hours), the freight or truck factoring company will then advance you a percentage of the total amount of your customer invoices, minus a small cost or fee. These values are determined by how quickly your customers submit payment for invoices, the total volume of invoices to be factored, the total monetary sum of the bills, and the length of the contract.
Solve Your Cash Flow Problems
Factoring provides quick funding that you can use in any way for your business. With a loan or line of credit from the bank or other traditional lending institution, you are usually required to specify exactly what you will be doing with the money you receive. But with factoring you can do whatever you want – it’s your money after all. Some of the many things you can pay for with the funds you receive include (but are not limited to):
– New trucking, freighting or transportation equipment
– Licenses and tax deposits
– Office equipment
– Advertising and marketing materials and services
There’s Nothing to Repay
Factoring is not a loan or credit line, so there are no monthly payments and nothing to pay back. For many factoring companies, once they buy your invoices they take on 100% of the risk. This is known as truck factoring with non-recourse.
Focus on Your Business
With factoring, you don’t have to worry about when payments are going to come in, and you don’t have to spend all your time hassling clients to pay. You are entirely free to focus your time and company resources on more profitable things than accounts receivable activities. Once your cash flow has improved, you can stop sending in your invoices. (Assuming you have agreed to a long-term contract.)
Trucking companies and freight brokerages play a vital role in our country’s economy, but because of the nature of the business, many transportation companies struggle. There is a way out, however. Let invoice factoring services solve your cash flow problems today.
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