Trucking businesses have a lot of challenges when it comes to maintaining cash flow. You need to buy fuel, maintain equipment, and make payroll, all while trying to collect payments from customers – which doesn’t always happen on time. Finding ways to increase your cash flow isn’t easy, but there are several ways you can help keep it consistent.
Keep an Eye on Expenses
Whether you use accounting software or outsource to an accountant or bookkeeper, keeping a watchful eye on your financials can help you stay on top of your cash flow situation. The more accurate and up-to-date your accounting is, the more knowledge you’ll have of where money is being spent. You should be able to look at the numbers anytime – through your system or your accountant – and get an accurate picture of your financial situation. That knowledge can help you make the necessary adjustments to spending whenever needed.
Boost Your Income
Positive cash flow means your income exceeds expenditures at any given time. Aside from spending less, it obviously helps to have more money coming in. Consider what you can do to boost your numbers. For example, when was the last time you increased your prices? Are they comparable to what your competitors are charging? Consistent evaluation of your income and expenditures is the best way to find more cash flow.
Evaluate Your Equipment
Owning a single truck or a small fleet can be costly. Take time to audit the costs of your current vehicle situation. Are you able to pay a little more on your truck loans and pay them off faster? Are you thinking of expanding your fleet or purchasing new equipment? Weigh the cost of new equipment against what you’re paying to maintain what you have. Which is going to cost you less in the long run?
Use Non-Recourse Factoring
Most trucking companies have a similar pain – invoices not being collected in a timely manner – or sometimes not at all. Non-recourse invoice factoring means you get cash for invoices right away, giving you quicker access to the funds you need to pay for things like fuel and payroll, without worrying about collecting on invoices that may go unpaid. This can help ensure positive cash flow while you pay monthly bills and work on future growth.
Practicing sound cash flow fundamentals, your trucking business can meet its commitments both now and in the future.