Businesses are now ramping up for the busiest time of the year. Carriers are going to be hauling shipments for school, Halloween, and then onto the holiday season to close out the year. However, getting ready for increased capacity demands, spot load, and more requires capital on hand to start. For many trucking companies, this means dealing with outstanding receivables and leveraging revenue from the summer to bolster efforts for the remainder of the year.
Preventing Summer from Lasting into Winter
Many carriers are still waiting on payments going back to the start of June. When invoices are issued with staggered payment windows of 30, 60, and 90 days, accounting is always playing the waiting game. All of the shipments of products in late spring and throughout the summer have been completed, but trucking companies and owner-operators are sitting on unpaid invoices. The outstanding receivables can cause cash flow to slow down, when in reality trucking companies need access to as much working capital as possible to get everything in order for the high demand in the fourth quarter. Some trucking companies will opt for loans to get extra capital, but it makes no sense to take on debt when there are faster ways to maximize cash flow and catch up on unpaid receivables.
The easiest way to ensure there are no outstanding invoices is for trucking companies to use freight factoring. Instead of waiting on payments from customers, trucking companies and owner-operators can simply submit their receivables to Single Point Capital and receive cash within a single day. This provides the capital necessary to prepare for the Q4 rush without needing to take out loans.
Making Plans for 2023 and Beyond
Staying on top of receivables is not just reserved for the summer. Trucking companies – and businesses in general – that want to kick 2023 in a strong position should be using factoring services throughout Q4 of this year. No one wants the headaches associated with trying to settle customer accounts that owe payments going back a month or longer. Factoring allows businesses to look forward, instead of looking back 30 to 90 days to chase outstanding receivables and spending time and other resources to remind customers that they owe money or sending invoices to collections.
As invoices are issued, they can be factored so accounts receivable is always up to date, and businesses can stay flush with optimized cash flow. This eliminates waiting periods on revenue, allows businesses to build up capital, and hit the ground running when the calendar changes for the new year. Whether you want to expand into new markets, upgrade equipment, grow your workforce, or anything else, factoring will help you get there are reduce (if not eliminate) the need for debt-based financing.
Automating the Accounting Process
Unpaid customer invoices are a huge resource sink for trucking companies and other businesses. When invoices are issued with payment schedules of 30, 60, or 90 days, businesses are constantly trying to play catch-up on revenue. This usually means sending out emails, letters, making phone calls, and other reminders to let customers know they owe money. If invoices go unpaid, then collections must be performed. Collections can add up to 45 days from the time the action is started to the time payment is received, thereby adding even more time to the payment schedule. No one wants to sink time and other resources into sending reminders or performing collections throughout Q4 and into the next year. Factoring services eliminate all of those hassles by automating the accounting process. Invoices get converted into cash almost as quickly as they are generated, which frees up resources for your business that would otherwise be spent trying to settle outstanding customer accounts. Factoring keeps cash flow optimized, automates the accounting process, and allows businesses to build up capital from now, into 2023, and beyond.
Learn More Today
Single Point Capital is a leader in factoring services nationwide. We work directly with our clients to provide the solutions they need to maximize cash flow and turn their unpaid invoices into cash within a single day. To learn more, contact the team at Single Point Capital today.