Cash management is one way to establish security with your trucking business. It is easy to get behind or in a bind when clients aren’t paying on their invoices in a timely manner. This can lead to your own bills being left unpaid. For this reason, bobtail factoring can be a huge benefit to your company. Factoring allows you to manage your cash flow since you can obtain a cash advance on already delivered goods.
With factoring, your accounts receivables are converted into cash. A factoring service provides the funds on unpaid invoices to the service provider (for a fee), then takes over the collection process for the invoice payment. Trucking companies can keep on with their services with the cash they need, rather than waiting on outstanding payments. Service providers can expect a few things during this process.
- They can make deliveries as usual, without having to worry about the bill. The factoring company follows up on the outstanding invoices with the clients themselves.
- Service providers only need to contact their factoring company with a copy of the bill or invoice in order to get their advance.
Factoring is an efficient way to maintain a strong cash flow even when clients are slow paying. This process can keep operations flowing like normal, keeping the company strong.