The transportation network moves products and other goods throughout the world. This system is currently comprised of almost 12 million locomotives, rail cars, trucks, and vessels. The Federal Motor Carrier Safety Administration reported that there are roughly 5.9 million commercial motor vehicle drivers operating within the United States. When commercial transportation companies experience cash-flow issues, invoice factoring may be a viable solution.
Small Business Invoice Factoring
If a small business has outstanding invoices, a factoring company may be able to assist. Basically, this is a type of accounts receivable financing. When a business has invoices that are due within 90 days, a factoring company may be able to provide immediate cash to cover these outstanding invoices until payment is received.
The Wall Street Journal stated that after the billed customer’s credit-worthiness is determined, a factoring company will then advance about 70% to 90% of the outstanding invoice amount. There is a transaction fee that will be deducted after the bill is paid.
How to Reduce Operational Costs
One of the ways that small businesses can reduce a percentage of their operational costs is by sending electronic, rather than paper, invoices. It’s important to note that paper invoices actually cost 57% more than their electronic counterparts. Given this, changing to an electronic invoicing system can assist with reducing a business’ operational costs. Furthermore, utilizing an electronic invoicing system can also streamline the overall billing process. This can make a positive impact on the time spent processing invoices as well.
Learn More About Transportation Factoring
Transportation factoring can assist your company with its cash-flow issues. This can be particularly beneficial when you are waiting for outstanding invoices to be paid. In addition to covering your day-to-day expenses such as gas and lodging, freight invoice factoring can also cover payroll and other types of operational expenses.
Once you speak with a representative, you will be able to learn more about how to obtain advance business capital. At that time, you will be able to ask detailed questions regarding how this process works. Your representative will also provide detail on the rates involved as well as additional information about their factoring services.