Flexible freight factoring and payment for freight finance can provide shippers with the opportunity to stay ahead of costs and carriers never have to wait long to get paid. Combining an audit with analysis and freight optimization tools significantly boosts the savings potential. Freight transportation is a massive spend category. Ensuring freight bill accuracy and keeping cash flow intact—an essential business need—is critical in today's freight market for 3PLs, freight brokers, and carriers alike. Freight factoring companies that offer flexible factoring terms and are easy to work with can provide the necessary capital to continue to keep all freight parties' prepared to keep freight moving without business interruption. Learn why in this article.
What is Flexible Freight Payment and Freight Factoring?
Freight factoring occurs when a delivery is made as scheduled. However, rather than waiting for payment, the freight company or owner/operator transfers or sells the invoice to a third-party freight factoring company, which then pays the invoice immediately, minus a nominal service charge. T. The freight company will continue to focus on other tasks in the business while the freight factoring company handles the invoice and does the waiting for payment in full from the shipper or supplier. Partnering with a freight payment company can also provide more benefits to maximize profit margins and avoid the risk of shippers taking longer than usual to pay.
3PLs, Brokers, and Carriers All Traditionally Rely on Shippers for Payment
Freight factoring companies help shippers and carriers by giving them the majority, if not all, of the funds needed for their company. Shippers may experience a delay in payment or get behind with accounting and invoices, but it directly affects the carrier. Carriers usually have to pay up-front costs like fuel or repairs, which can cause issues if the payment is not received on time. In explaining the billing system, Supply Chain Dive states, “So carriers may not be due for a freight billing revolution any time soon, but that does not mean they shouldn't embrace it when possible. Companies pay significant amounts of money or expend valuable resources for invoice audits which, as Supply Chain 24/7 suggests, can be better managed by both shippers and carriers upfront.” Using a digital freight forwarding platform can provide shippers with an upfront efficient way to pay carriers and brokers rather than make the businesses wait for payment. Having the option for shippers to pay upfront and carriers to receive the payment allows for companies to exponentially grow without setbacks.
Additional Reasons to Leverage Flexible Freight Payment Solutions
Freight payment, also called freight audit and compensation, refers to specialized systems and processes that manage high volumes of freight invoices and deliver deep business intelligence about freight costs. Companies can help carriers find more capacity while ensuring shippers can make the proper payment on time. Freight factoring can help any business experience the following benefits:
- Flexible payment solutions that reduce the risk of carriers not getting paid and still allows shippers to secure the capacity.
- Immediate payment which can help prevent the carrier from rejecting the load based on the shippers’ ability to pay.
- Cost structures that are built with flexibility in mind to meet the needs of shippers, carriers, and the ultimate customer.
- Flexible cancellation policies, provided the software vendor makes that clear.
- Easier financing than going through a bank, by o. By obtaining a next-day payment and immediate processing, shippers and carriers can receive the payment almost immediately.
For companies to achieve growth and scalability, the best decision is to partner with freight payment services that can strengthen specific businesses and provide tools to increase efficiency. For freight spending and payment, putting a freight payment solution in place is necessary to effectively manage costs and ensure on-time payments.
Take Advantage of Fast, Easier Freight Factoring and Payment by Signing up for ComFreight Now
Freight factoring can provide a higher level of business intelligence and can integrate data from multiple sources, delivering much more valuable information to be used for decision-making and process improvement. To see the benefits of an easier way to handle payments, request a demo to see how the HaulPay platform works.