Running a freight company, delivery service or even just a business which relies heavily on transportation will bring a particular set of challenges to overcome. Cash flow problems are often one of the most common of these and can really hold back a business when it’s looking to expand.
From the start of setting up your company there are many things you can do to try and avoid or keep the effects of cash flow problems to a minimum. They can lead to staff not being paid on time, expenses overshadowing revenue and ultimately losing clients. For these reasons it may be best to put the following steps into practice.
From the off it is essential you keep on top of every payment. It can be easy at the start to let clients make late payments as you will be more desperate to please them in order to not lose their business.
However, if they get into a lax habit from the off it can be hard to instil a more reliable payment plan later on. Send out invoices promptly and chase any unpaid ones up as soon as possible. Having a strong relationship with clients is more likely to guarantee timely payment and their loyal business.
Invoice financing found through Touch Financial can really help your business grow by setting up a better cash flow situation. Rather than waiting a few weeks or months for all your clients to pay their invoices this allows much quicker access to the cash you have rightfully earned.
There are many benefits to receiving your payments early as your business can quickly reinvest in staff, further supplies or other necessities for taking on the next big job. Waiting around for the finances can hinder your progress and prevent you from taking on work from large clients, but through invoice financing you’ll have enough to pay for all work.
One of the main ways you can end up with a cash flow problem is if your business grows quicker than expected, leading to more expenses on staff, fuel and repairs which overtake revenue. The revenue should catch up eventually when invoices are paid.
Having a detailed financial plan with space allocated for overspending can lead to a more balanced cash flow. This fall back amount will allow you to grow the company and meet the demand, not having to turn clients down and reaping the rewards of your success.