In a time of life marked by pickup and delivery orders of items to fill the refrigerator, or even a fridge itself, the trucking industry must thrive on meeting the supply-demand. The truck payment process is a staple aspect for owner-operators to grow their business in a post-pandemic world. As noted by FreightWaves,”The trucking industry, overwhelmingly made up of small businesses operating six or fewer trucks, moved 10.23 billion tons of freight in 2020, a 13.6% drop from 11.84 billion tons in 2019. The industry generated $732.3 billion in revenue, or 80.4% of the nation’s freight bill, unchanged from the year earlier.” Still, the ability to move freight and generate more substantial profits comes from managing the day-to-day cash flow more effectively.
The Challenge and Costs of Delays in Paying Truckers
When starting a truck company, shippers should consider the business environment and freight companies’ expectations. It has been traditional for truck driving companies to offer their customers 30, 60, and even 90 days in their payment terms. While that works great for the shippers in need of transport, where does that leave truckers? As they wait for their cash to continue the flow of business, truck drivers resign to simply hope that their maintenance needs, inspections, and overhead costs, such as insurance, will wait for them as well. This doesn’t even factor in the gasoline and other daily expenses required for business. Customers who make their truck driver payments late end up damaging a company’s working capital and freedom to focus on the next load.
Faster Payments Incentivizes Truckers and Lessens the Risk of Tender Rejection
A trucker payment evolution that shortens the time collecting payment incentivizes many businesses. A faster financial turn-around opens doors for carriers to focus on increasing their capacity, whether that means getting more customers or adding to the one truck that started it all. While the average trucking company cannot maintain control of the product availability, they can control their driver availability, which would lessen their chance for tender rejection. Driver availability for the owner-operator is often best controlled by managing their owner responsibilities well. Also, when owner-operators can streamline their business process, they can offer competitively lower rates to customers. This wouldn’t be possible for a business with insufficient working capital. Overall, less time following up on invoices means more time on the road.
Ways Truckers Can Realize Faster Payment Processing
Depending on the context, attaining business efficiency comes from developing many innovations. Different business philosophies or personalities play into what processes to streamline, outsource or otherwise adjust. For the trucking industry, truckers should follow these specific ways to expedite truck driver payments:
- Integrate your systems to create a single source of truth. New businesses institute different systems to fit a specific need or find “the right one.” Consolidate by funneling all systems through one predetermined and integrated platform or avenue.
- Leverage data to understand costs versus income. Creating an information gathering net is incredibly helpful because it collects information that would otherwise fall through the cracks of daily business dealings. This data can reveal customer patterns that would be helpful to know or even areas that prevent growing capital.
- Remember to streamline freight invoicing and sharing processes. It is advantageous to have a clear sight of freight invoices and communications. This ensures collection for truck payment is timely followed up on or submitted to freight factoring services if used.
- Choose a factoring solution that does it all. The benefits of freight bill & invoice factoring for truckers form an all-in-one system that provides an instant, clear view of the company’s financial health. That further makes daily business actions and decisions easier than ever.
Get on the Road to Faster Truck Driver Payment With BasicBlock Today
It’s time for the trucking industry to evolve its payment methods and expectations, but business owners must streamline their processes to expedite payment until industry standards change. By choosing a partner to receive a faster truck driver payment, the options for working capital growth begin to grow exponentially. For those invested in developing their business in this way, get your money moving with Basic Block today.