Five Things You Need To Know About Transportation Factoring Today
What is transportation factoring?
This is another form of freight factoring. It is the process in which the sales within an account or invoice are valued for a discounted price. For example, a trucking business will sell all of its unpaid invoices to a company that is able to pay the trucking company within a few days or less. After a factoring company buys the invoices they will then be able to collect the invoice from the clients who owe. Directly contacting the client and making sure they pay the remainder of the bill. Sometimes a factoring company will have the business itself to contact their customers to collect the payment. When the customer finally pays their debt the business can receive the remainder of the amount. Subtracting from their fees of course.
Selecting the best transportation factoring company
There are many factoring companies and businesses all over the world. They are vast and competitive. It is wise for an individual to do their research properly in order to receive the best deals as possible. It is vital to consider the business need of the company and what benefits are available versus the best deals and offers. Ensuring the business is eligible to sign up to use a factoring service, it would vary depending on what category the business thrives in. In this case, transportation. There are many factoring companies that specialize in certain industries providing special offers depending on what they can provide for their clients.
Is there a limit on time?
Being able to choose the best factoring company for the business’s unpaid invoices will depend on how delinquent the invoices are. In some cases, these companies do no accept delinquent invoices. Usually up to 45 days or more unpaid. On the flip-side, there are companies that will accept invoices that are 90 days overdue. In other words, be sure to ask each company the services they provide their clients.
When searching for a transportation factoring company it’s wise to consider a company’s approval process. It’s best to find a company that can provide their clients with a turnaround time that is acceptable as well as reasonable for the approval for funding. Usually, within 24 hours from the moment, the client submits their invoice a company can transmit a percentage of the funds. Depending on the company, of course, the factoring company will reach out to the invoice unpaid directly. Or the company will have their client do the task themselves. This will vary on the factoring company policies.
A freight factoring company in today’s society have factoring rates and fees. These rates are calculated depending on the different factors. This could determine a company’s potential rate on the service. It can depend on what kind of industry the business is in and credit scores. Furthermore, the timing in which the clients pay their invoice is a factor and the average cost of the invoices and whether or not it is monthly or a one-time payment. To determine the rate, the company can provide the following factoring service charges that are usually between 2 to 5 percent. Fortunately, there are factoring companies that reward their customers if they can get their customers to pay their unpaid invoices quicker. Long story short, find a service that offers their clients a larger percentage upfront and reasonable service fees. Another element to factor in is customer service. Being able to reach and contact the company with ease can make the freight factoring process a smooth sailing experience. The most reliable of companies will provide their clients with the option to contact through Email, phone and sometimes text. There are other branches and services that allow a face to face meet with a representative.