The Strong Benefits of Freight Factoring

Factoring – not just a form of financing the supply and range of services. This distinguishes it from the more traditional nature of international trade instruments (letters of credit, guarantees, etc.). The participants of the transaction are: Supplier – seller of goods (works, services), is interested in obtaining as quickly as possible for their payment. The buyer, purchased goods (works, services), which is advantageous to pay for delivery to the greatest possible postponement. Factor – A bank or factoring company. Paid by the Supplier of the accounts receivable.
Stable funding is a prerequisite for successful business development. To stabilize the financial flows, minimizing risks and timely payment of the needs of enterprises can use a form of short-term financing as factoring.In an ideal world in freight factoring is not necessary. Companies – carriers will receive orders, deliver the goods, calculated with clients and in a short time to get paid. Once a business owner will receive proper care, he or she will pay the costs – maintenance of trucks, cost drivers, the price of fuel and the payment of suppliers. And also may be paid for additional costs such as for example a permit for oversize and overweight.Unfortunately, the majority of small and medium-sized transport companies in North America does not work that way. Some delay with payment of transport companies services – for decades or more taken that way to deal with the carrier, that is a month after the services are provided – the smaller the period of payment. In addition, there are drivers, staff and suppliers, whose services must be paid to the joint business was, and customer trucks to use the road.Therefore, freight factoring is that is needed. You should perform the following steps:

1. The customer orders shipping and precise details of the actual cargo, the delivery date and type of service.

2. The auto company takes the order and delivers the goods.

3. The auto company sends an invoice factoring company, and not the client.

4. Freight factoring companies pays a percentage of each bill of lading and invoice the client5. Once the customer has paid in full, the remaining amount (net of factoring commissions) paid to the motor companies.Overall, this is a simple and intuitive process – invoice paid almost immediately, it ensures the absence of administrative routine in the relationship with the customer. It also means that do not have to wait for weeks and months on end to get your money. The use of factoring as a financial instrument in modern conditions helps expanding export operations.

5. Once the customer has paid in full, the remaining amount (net of factoring commissions) paid to the motor companies.Overall, this is a simple and intuitive process – invoice paid almost immediately, it ensures the absence of administrative routine in the relationship with the customer. It also means that do not have to wait for weeks and months on end to get your money. The use of factoring as a financial instrument in modern conditions helps expanding export operations.
-Gives the company to attract new customers and offer them preferential terms-Shopping goods and services is an important element in the business insurance strength mutual responsibility of the parties is a promising tool for small and medium businesses that lack the resources. Freight factoring – is not the best and a speedy option, but if you want to ensure the company’s cash flow is constant, then it is something that is worth considering. Factoring commission will vary and can range from 1.5% to 6% of the bill. The service – a very profitable thing should also consider the time that is saved by the fact that we should not constantly talk on the phone with clients about unpaid invoices (or stand in line at the bank, in order to set the loan). In addition, it is possible to make an accurate calculation of wages of drivers.

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Why you should factor your freight bills: 4 benefits of doing it

air-freightFactoring your freight bills through a freight factoring company is a great way to have a steady income, without waiting for your customers to pay their invoices. Sometimes customers can take up to a month or even more, just for you to receive the payment for a freighting job you had already finished. If you want to cut down on that wait and be paid immediately, you may want to work with a freight factoring company. Through the factoring services that they provide, you can get paid right away regardless of whether the client has paid their shipping invoice or not.

Freight factoring companies can pay you in advanced because they have already bid for shipping invoices. And if you choose to fulfill their shipping invoice jobs and then after you have completed the job, you are then paid a percentage of the amount. Once the client or shipper has finally paid the full amount, you are then also given the final amount that is owed to you. Factoring your freighting invoices will then provide you with an easy way to find shipping jobs and also it gives you a convenient and quick way to get paid for finishing the job.
Factoring your freighting bill has many advantages too. As a freighting company, you should be aware that you can get a lot from availing of the services provided by freight factoring providers. Here are some great benefits you can receive. Hopefully, this article can convince you to work with a freight factoring company.

1. Immediately paid
You do not need to have a long waiting period if you want to get paid. If you choose to work with a freight factoring company and have your freight bills handled by that business, you can get paid immediately as soon as your job is done. If you choose to receive the payments for shipping jobs by yourself, you would also have to wait for a long time, sometimes as much as several weeks. That wait time could be a disaster for a freighting company that has to cover costs. So if you need a steady and immediate flow of income, try availing of freighting factoring companies, you can get paid right away.

cargo-box2. Reduces risks
Sometimes clients may have bad credit or will simply refuse to pay. This can be bad for many freighting companies, because while they have already spent the time and money to complete the job, and they will not get paid. This means that freighting companies could lose money through fuel costs and other expenses. This can be risky and could mean your company going under. If you would like to reduce risks, you can work with a freighting factoring company. You are paid regardless of whether the customer pays or not. There is a comparatively lower risk to you because the freighting factoring company will handle the payment collections.
3. Help cover your expenses
Freighting companies will have to cover a lot of expenses to keep their business running. Trucks can cost a lot of money to keep running. Fuel consumption and costs can be huge money sinks, and there are also maintenance costs and other fees. Freight factoring can help you cover those expenses through a steady flow of cash income to help keep your business running.

4. Provide your company with more opportunities
You can get more opportunities through working with a freight factoring service provider. This is because you can gain access to more shipping jobs through the ones listed by the freight factoring company. You also have access to a steady flow of cash, which could help you expand business operations.

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