Regardless of whether your trucking company is large or small, cash flow is inevitably a struggle at one point or another. No business owner anticipates these issues, but problems often arise, even for the most successful companies. Sometimes, these cash flow issues are not from lack of work, surprisingly. Many carriers will have huge months in terms of work but find themselves waiting on invoices to be paid.
Because of the contract nature of our industry, it is not uncommon to have to wait 30, 60, or 90 days to get paid on the work we do. This can cause serious problems with your company’s cash flow. There are always bills to be paid, employees to pay, and maintenance, repairs, and operating costs to consider. Fortunately, there are a few simple tips that you can keep in mind to make sure that your company’s cash flow stays in the positive. These tips include:
- Make sure your contracts clearly state the terms of payment – Make sure to have clear and consistent payment terms stated in your contracts. Your customers should know what is expected of them and they should be aware of the timeline on which you expect to be paid for your services.
- Don’t sit on invoices – Make sure to send invoices immediately if you expect to be paid quickly. Many businesses struggle due to internal issues, not the client’s side.
- Offer multiple payment options – The more payment options you make available to your customers, the easier you make it on them to pay you. Maybe some clients are old-school and prefer to send in a check. This might mean that you will have to wait longer to get paid. More modern businesses may want to pay by ACH debit or by credit card, which would mean that you get paid much faster.
- Spread out your bills – While it may not be possible to space out all of your monthly bills, it might be helpful to your cash flow to pay different bills at the beginning, middle, and end of the month, rather than having to pay everything at the same time. Consider working with your creditors to set up payment dates that are well spaced out from one another.
- Consider invoice factoring -Are you looking to get paid immediately and not worry about cash flow issues any longer? You may want to consider turning to a freight factoring company to get paid immediately on invoices and letting them wait to collect from your customers. Many carriers swear by invoice factoring as a way to get rid of the headache of waiting for invoices to be paid.
By carefully planning your monthly budget, stating the payment terms on your contracts, and offering multiple payment options, you could avoid the inevitable cash flow problems that hinder so many of us in this industry.