4 Benefits Of Invoice Factoring

by Sean Bryant on August 2, 2017

Invoice Factoring

Invoice factoring has gained significant popularity as a means of financing a growing transportation carrier or freight company. Many of these companies’ customers pay their freight bills slowly, sometimes taking up to three months to pay an outstanding invoice. Most small owner-operators are not financially prepared to manage this payment period, and it can prove problematic for even the largest freight enterprise. Below, we’ll describe invoice factoring — or freight bill factoring — and the 4 major benefits it brings to companies of any size.

Benefit #1: Improve Your Cash Flow

The major benefit of factoring freight bills and the primary reason why companies use it is that it improves your cash flow. Instead of waiting 30, 60 or even 90 days for customers to pay an outstanding invoice, you receive an immediate payment from the factoring company. The factor will then focus on collecting the payment from your customer —so you don’t have to. This accelerated payment system has a dramatic effect on your cash flow. It enables you to manage short-term expenses and provides you access to the working capital needed to take on growth opportunities and make long-term investments for your business.

Benefit #2: Increase Sales

When correctly implemented, invoice factoring can help you increase sales. Factoring allows you to extend payment terms to customers that you might otherwise have turned away due to their lengthy accounts receivable turnover times. If you have refused this type of customer in the past due to cash flow problems, factoring can help you take on more customers of this kind.

Benefit #3: It’s Easy to Secure

Unlike most finance programs, factoring does not have tough qualification criteria. The most important requirement is that you work with customers who have strong commercial credit. The factoring company uses your invoices as collateral to advance funds. If your customers have solid credit ratings, then it’s easy to partner with a factoring company like Accutrac Capital; simply visit http://www.accutraccapital.com/invoice-factoring to see how your business can qualify for factoring rates as low as 1.59%.

Benefit #4: It’s Faster Than You Think

Factoring lines are deployed in days, rather than weeks, which means that you won’t have to wait for the funds needed to keep your fleet on the road. You can use this type of financing if you have a cash flow emergency and need financing quickly. Guarantee faster funding by speaking with your freight bill factoring company to find out what documentation they need so they can process your requests even faster.

The invoice factoring specialists at Accutrac Capital understand the importance of timing in your operations. They work hard to make sure you get paid within hours of delivery verification. When you take your customers’ invoices into account with a trusted and reliable factoring company, you always get paid in advance.

You can use this much-needed money for fuel,maintenance,taxes, payroll, insurance, and even new equipment. When you work with an invoice factoring company, you secure a partner dedicated to your success in the here and now, and the growth of your business in the future.

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Sean Bryant

Sean Bryant created OneSmartDollar.com in 2011 to help pass along his knowledge of finance and economics to others. After graduating from the University of Iowa with a degree in economics he worked as a construction superintendent before jumping into the world of finance. Sean has worked on the trade desk for a commodities brokerage firm, he was a project manager for an investment research company and was a CDO analyst at a big bank. That being said he brings a good understanding of the finance field to the One Smart Dollar community. When not working Sean and he wife are avid world travelers. He enjoys spending time with his daughter Colette and dog Charlie.

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