Why Trucking Companies Should Consider Factoring Their Freight Bills
January 23, 2009
An easy analogy to understand freight bill factoring is a physician hiring a billing agency to handle the financial end of collection from patients and insurance companies. It’s a mutually beneficial relationship because the doctor can concentrate on patients not the ticky-tacky headaches of billing, and still know he’ll receive a paycheck, and the financial end is handled by experts in their own field who are paid for their services.
In the trucking business, a financing company a.k.a. “factor” buys a trucking company’s freight bill, advances the capital within a few days, and then takes on the responsibility of collecting from the trucking company’s clients. Of course, business is business and the factor collects a fee for their services, and depending on the terms of agreement may be entitled to recourse if a freight invoice goes unpaid.
The huge upside to invoice factoring for a small to medium sized trucking company is increased cash flow. Instead of waiting months for a return on an invoice, capital that is meanwhile needed to keep the company afloat, there is now a turnaround of only a few days.
Most fees for factoring are going to run between three to five percent of the total bill, and like traditional lending rates are based on a good credit score, factoring rates are affected by the reliability of customers and sometimes how quickly they pay their invoices. Likewise, the factor is going to want to have a fair understanding of the customer list before signing on, and proper documentation will be needed including an original bill of lading.
Don’t be concerned if the factor requests a reserve from the advance on the invoice. It doesn’t necessarily mean that your trucking company is not a good investment, it’s a common practice that the factor uses as insurance against unpaid invoices or other fees they might need to collect. A typical scenario of a reserve is a trucking company receiving 85 and 90 percent of the freight bill up front from the factor, and then when the invoice is paid, the rest is paid to the trucking company minus the factoring fee. All the money due your company will be received, pending any major complications, and the major bulk of the cash is in your account within days. Plus, even in the event of losing the reserve, you are only out a small portion of the invoice instead of the full amount.
Factoring in the freight business can be a huge asset to a company looking for a way to free up some cash flow. Just remember to always seek out a reputable financial company, and be fully aware of the stipulations of the factoring agreement.
A web host is an important partner to your online presence and marketability. The web host is the company who administers your web site. Web hosting is a service offered by companies that own the necessary computer equipment that is connected to the Internet so the web site you’ve designed is available for your customers to access. I hope this post will help you find the best web hosting provider for your trucking company.
You don’t have to be a technology guru to figure out which web hosts are the best providers. You do have to be a smart consumer, and do a little homework.
The major area of concern is uptime, which is the amount of time your website is available to view on the Internet. Downtime can be caused by a number of problems from viruses to equipment failures to power outages, and should be expected from time to time,. A respectable claim from any web host is a reliability rate of 99 percent. Be sure your service contract ensures some type of satisfaction guarantee, and go over the fine print to make sure that you understand reliability standards, time limits, set-up fees, and refund policies. A reliable web host is critical to your website’s success.
After you figure out the numbers game, then it’s just about some detective work. Look for companies with at least a year under their belt who have a proven track record or at the least, show some stability. Comb through message boards and testimonials. Look up the host on reliable web sites that rank or recommend these types of services, many of which will give web hosting reviews. Find out the actual physical location of their servers and make sure it’s in a safe area of town. Better yet, ask if they are located in the same area as their business offices so you know they are keeping a close eye on your information.
As you check out different web hosting providers, click on their “Contact Us” links and see how they respond. A little sampling of their product could let you know if they’re quick and helpful in their responses.
Building Your Trucking Company Website
January 9, 2009
Getting your trucking company on the web could sound a little out of your league, but if you break it down into a few steps, it’s really something anyone can do. If you don’t believe it, then just surf the Internet for a few minutes and check out all the strange stuff out there, and then you’ll be a believer – just about anyone can build a website.
The first step is designing the website. It’s similar in idea to creating a document on your word processor but you just use software geared specifically to creating web sites (common programs include Macromedia Dreamweaver, Adobe GoLive, or Microsoft FrontPage). These programs are designed to be user-friendly which is code for you don’t have to be a techy to understand how to use it. If this still feels like to much of an undertaking than just hire someone to design and maintain your website for you.
Next, register your domain name. Once you find an address or domain name that is available and identifies your company then you register it with a domain registrar or web host for a yearly fee. You can register your domain name for 1 to 10 years, but be aware if you let it expire the name will be up for grabs by anyone.
Last, contract a web hosting service. They are the company who will take the web site you’ve built and put it out there on the “www” under the domain name you’ve registered. They are the car lot of the internet world. It’s where you park your trucking company website and wait for customers to come take a look.
At every step along the way, it’s key to do your homework, ask questions from people who have done it before, and look for assistance from companies be it web designers or web hosts who have built a strong reputation for customer service and reasonable rates. If you shop around and get a sense of the going rate, then once you’re in the ballpark of price ranges, just look for those companies who come with the highest recommendations. As with most services, you get what you pay for.
