An Insight into What a Freight Factoring Company Does

Freight factoring permits businesses to sell their account receivables or invoices to a factoring or trucking company at a discount for payment within twenty-four hours. Freight invoice factoring is a reliable solution for multiple big and small trucking companies to offer immediate cash flow and also back-office support.


Need for factoring

You save yourself from a lot of hassles when you allow a factoring company pay you up front and handle the collections and billing for you. When you take into consideration the time spent on road and everything needed to run your business, you cannot wait for thirty to sixty days to receive payment on your invoices. Even though the approximate number of days for shippers and brokers to pay carrier is between 30-45 days, around 60 percent of the invoices are paid late. After you submit your invoice to the factoring company, you receive your payment the next day or the same day. Freight factoring companies are responsible for collecting the invoice, even when the payment is late.

Working of factoring

After a load is delivered, you submit the rate confirmation and BOL (bill of landing) to your factoring company. The company confirms a clean delivery with the brokerage. Once the verification is done, the payments get deposited in your account via wire transfer (under an hour), Automated Clearing House or ACH (overnight) or instantly through your fuel card. Best freight factoring companies make invoicing all the more easy by equipping you with an online portal that allows you to create invoice and submit the rate confirmation and the bill of landing.

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