Is there any other business like trucking? Last year, we were seeing record prices per mile. This year, they’re talking recession and rates are divebombing our trucking businesses. If you’re getting started with a trucking business, you may need to know about factoring and TruckingOffice PRO’s Remit To option.
Getting Started Despite High Fuel Prices?
When you’ve invested in getting your CDL and spent a year on the road to learn about trucking, high fuel prices can scare you away from the industry. When you have to think about paying a loan for buying your rig… it’s more than a little intimidating to think about going into an industry with
- supply chain issues
- disrespect of the trucker’s time and unpaid detention fees
- the government trying to put speed controllers on trucks
- high fuel prices.
We don’t want to discourage you. In some ways, this might be a great time to get into the industry if you’re willing to give it a try. If you learn some techniques to manage your cash flow, you may be building the start of a successful trucking business.
Fuel prices are unbelievable right now. But don’t let that be the reason not to take a load. Use factoring as a way to beat those prices.
Factoring
Essentially, you’re offering the invoice payment for a load for an advance on the money from a factoring service. The factoring service will buy that invoice for a discount from the full amount.
For example, you may have a contract with a shipper, you’re expecting a full payment. A factoring service will make a loan to you in exchange for that invoice to be paid directly to them. But the amount of the loan will be less than the amount of invoice. That’s how they make money.
So if you need some upfront cash, a factoring service is a tool for the owner-operator trucker.
If you choose to use a factoring service, how do you make sure that the invoice is paid to the factoring service?
Use TruckingOffice PRO to make it simple, and use TruckingOffice ELD to Make ELD Data Work For You.
Remit To with TruckingOffice PRO
Truckers don’t need complicated. It’s tough enough dealing with all the roadwork we face, all the government interference, all the paperwork that running a trucking business.
We want that invoice to be paid to the factoring service without any extra effort on your part. So TruckingOffice developed the Remit To option. Instead of the PAY TO the trucking company, the factoring service name and contact information is in the the PAY TO box on the invoice.
It’s that simple. The shipper pays the factoring service without the owner-operator being stuck in the middle.
- You don’t have to remember to pay it back. The payment goes directly to them.
- You get money when you need it – now – not later, after the delivery is complete.
- You make a small investment to get started without going into debt with interest.
Maybe the question should be
Should an owner-operator use a factoring service?
That’s a question for every individual trucker. We can’t answer it for you. But what we can do is ask a few questions to help you make that decision.
- Are you going to make money on this load even if you pay the factoring fees?
- Do you know how much it costs for you to haul this load?
- What are your business expenses, including insurance, loan payments, paying yourself a living wage, fuel costs and maintenance on your rig?
How do you know the answer to these questions?
If you’re just getting started, you need to be collecting data right now to be able to answer those questions. Every load produces money, takes time, and has expenses. If you don’t know those numbers, you’re at risk for making poor decisions about loads, such as what you should bid for a load (and what you need to accept – KNOW YOUR WORTH!) and if it’s a good idea to deadhead or to take a load that costs you money to get back home or to a place where you can get a load that’s worth your effort.
How do you know those numbers? Figuring them out by hand or by using a spreadsheet is going to take a long time. You need a trucking software that figures that out for you.
Trucking Software is Key to Trucking Success
Start any new business and you need the tools to make it a success. Trucking software is as important to an owner-operator’s business as the equipment is. New owner-operators might want to try to run their businesses on free software platforms, like free IFTA software or downloading free invoice templates.
Why not use free products?
They aren’t free. That “free” IFTA calculator will let you enter your data without charge, but won’t give you a report unless you pay.
Invoice templates may not have the categories that truckers need on their invoices, such as fuel surcharges, lumper fees, or tolls. Templates may not be linkable to an accounting program. Tracking miles per load, miles per state, miles per delivery (if running LTL) is not available on most accounting programs .
But TruckingOffice PRO does. All those taxes that trucks have to pay? TruckingOffice not only manages your invoices, but also your dispatches, routings, and your maintenance. That’s what you need. You’ll spend far more time than money trying to run a trucking business using free software.
If you want to try TruckingOffice, we’ll let you do it for free. You’ll get far more than you expect with TruckingOffice PRO – but you’ll get everything you need to build your trucking business, even when fuel prices are nuts and our rates are dropping.
Don’t be discouraged. Let’s get building your business with TruckingOffice PRO.
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