I am a big sports fan and have coached football, swim teams and baseball for many years. I love all the sports analogies that one can use to motivate people. Words that resonate somewhere down deep – - words that strengthen resolve and stiffen the spine.
So it is with apologies to Vince Lombardi: Cash flow isn’t everything, it’s the ONLY thing.
When you don’t get paid right away, bills sit to accrue interest and late fees. Too many times, you borrow some money to get by and then it becomes impossible to pay it back right away, so it becomes another bill, costing you more interest and fees. It is a vicious cycle.
Some truckers resort to quick pay solutions. It looks good on the surface, but in reality they are accepting a discounted load. The Broker knows that usually a trucker who needs a quick pay will be more than happy to take any load in order to get the money upfront that he needs. This leads to another vicious cycle of smaller and smaller paydays that squeezes the best intentioned trucker – - so the key is to stop the cycle.
Here’s the game plan: Stop waiting to get paid. If you take a moment to compare a factor rate of 1% over the possibility of permanently losing opportunities to better financed truckers, passing up customers who need extended credit terms, or accepting discounted loads just to make expenses, you’ll realize that waiting costs you more money than getting paid right now.
When you accelerate your cash flow, bills disappear fast, your credit rating improves, and debts decline quickly. Factoring invoices turns the collection process over to professional managers who monitor your accounts, without charge, to ensure you keep getting paid. Now watch your profits accumulate rapidly which allows you to get ahead of your payments and take advantage of cash discounts.
So get in the game and stay there. Stop playing around with shuffling bills, flying credit cards and underthrown paydays. Cash flow is the ONLY thing that matters and once you know how to play the game, you win.
A transportation industry expert, John Downing is the Vice President at Freight Capital who specializes in financial solutions for the trucking business.
