While cash flow is important to every business, it is especially important to the trucking business. Cash flow can involve anything from checks to Paypal payments. In the trucking industry, customers can take 30 to 90 days to pay. This can greatly hinder your business, as you are stuck waiting for pay. When starting a trucking business, cash flow is especially important. There are many expenses to take care of and with the long waits for money, they can be difficult to pay off.
1. Trucking Business Plan
When starting a trucking business, one of the first things you should have in order is a trucking business plan. With a business plan, you will be able to show the goals of your business to banks, investors, and other potential partners. This plan will also show that your business is stable.
When writing a business plan, you want to describe your business in detail. Include a description of your business, your reasons for starting it, and the type of trucking you intend to do. You will also identify the expected gains and costs of your trucking business. You may also describe your marketing strategy, as well as how much you plan to spend on advertising. Finally, consider including the management and operational details of your trucking business.
2. Use Freight Bills
One of the most damaging aspects of the trucking business is the long wait for payment. Freight bills are the best ways to augment the cash flow of your trucking business. When hauling a load, you can send a freight bill to a freight factoring company. The factoring service will let you know if your customer is approved for load factoring and you will pull the load. Once finished, all you need to do is wait for your customer to pay their invoices. This will ensure that you receive your cash immediately instead of waiting 30 to 90 days for payment. Factoring freight bills will allow your trucking business to carry new loads, meaning your business will receive more revenue.
3. Keep Your Trucking Business Optimized
Optimization boosts efficiency. By using the most recent and updated technology, you can keep your trucking company ahead of the game. Electronic Logging Devices, otherwise known as ELDs, offer many services to keep your trucking business efficient. You might also consider optimizing your trucks, meaning that you get maintenance for your fleet quite often. This will reduce the risk of future, unexpected repairs. If you are looking for help with IFTA reports, IRP reports, dispatching, expenses, and maintenance, TruckingOffice has all-in-one trucking software.
Bonus Tip: Analyze Your Cost-Per-Mile Rates and Compare Them Against Your Competition
If you feel that you are paying out too much on driving costs per mile on your loads for your trucking business, there are some steps you can take to lower your overall costs. By managing your overall trucking transportation cost, you can have a well-planned and organized, high-tech-driven fleet in place. It can be easy for your team to overlook minor things such as the cost of orders or your revenue. That’s where reliable TMS software can help. With TruckingOffice’s software, you can easily keep track of every cost your company endures while your drivers are on the road, and then use that information to determine your cost per mile for each load.
When you stay on top of your cost-per-mile rates, you have the data you need to keep your profit margins high. Understanding how much your competitors are making for similar loads can help you keep your prices competitive and increase your revenue. TruckingOffice trucking management software can help trucking companies keep track of their rates per mile, allowing you to get an in-depth, closer look at just how much you are earning with each load you haul. And if you find you are not bringing in as much income with a particular load, you can make adjustments as needed to help improve your profits.
Automate Your Invoicing System With TruckingOffice
When dealing with cash flow in your trucking business, you want to use a method that you can trust. Instead of relying on methods that are prone to error, automate your invoicing system with TruckingOffice.
Our trucking management software will allow you to create, send, and track invoices and payments to help you from running out of money. Our software will also help you with driver settlements, IFTA reports, IRP reports, maintenance tracking, revenue reporting, and more management reports. With TruckingOffice’s TMS, you will also receive help with dispatching, expenses, maintenance, reports, and stats. By registering on our website, you will receive 30-days of our software for free!
Sounds like good advice about how to run your trucking business over the long haul. Freight factoring companies are used by a lot of carriers to control cash flow. Some shippers pay consistently at 30 days, but others are much more random. Also the factoring companies provide credit scores for the brokers so you can avoid not getting paid for moving a load.