With the wide range of potential financing options available today, it can be difficult to know which is best for your business. Which option will serve all my needs? Which can I be approved for? Luckily, you do not have to make your decision alone.

Here, we will look at the specifics of invoice discounting and invoice factoring, comparing the two and describing some of the benefits or potential drawbacks of each. By the time you finish this blog, you will be well informed and well on your way to making the best decision for your business. Let’s get started.

Invoice Discounting

Invoice discounting allows business owners to better control the value of their unfinished sales. In invoice discounting, when an invoice is sent to your customer, a proportion of the total amount becomes available from the lender, providing a valuable source of working capital throughout the month.

While very similar to factoring, your customer may not be aware that you have taken on cash flow finance when you use the power of invoice discounting. You remain in control of your sales ledger, collecting payments as normal, and sending out reminders.

This system allows you to maintain your own style of communication and standards of customer service. In many cases, those factors are key to the success of your company.

Factoring

Like invoice discounting, factoring also allows you to turn your sales ledger into working capital. However, as stated previously, when you decide to pursue a factoring option, your customers will be aware you are using this method. The factoring company will be the one communicating with them, sending reminders for payment.

There are also significant benefits to factoring. Non-recourse factoring with Advanced Commercial Capital protects you from accruing debt. If your customers do not pay their invoices, you are not held responsible, and the factoring company takes on the risk involved.

Additionally, your ability to be approved for invoice discounting is dependent upon your own reliability and credit, whereas factoring companies such as Advanced Commercial Capital make their decisions based on the reliability and credit of your clients.

Which One Best Suits Your Needs?

Even with the differences laid out, it can still be difficult to know which is best for you. However, invoice discounting may be a promising option if:

• Your credit control procedures are proven to be effective
• You have minimal to no debt
• Your customers generally pay on time
• You meet the minimum level of turnover required by the lender

Conversely, if you do not carry out credit management processes in-house, invoice factoring is likely the better option.

Work with Advanced Commercial Capital

Advanced Commercial Capital is in the business of helping your business grow through fair and honest invoice factoring. If, after reading this blog, you would like to have a more in-depth discussion about your financial needs, including whether invoice factoring may be right for you, call our office at 855.465.4655 or fill out our online contact form today.

In tough financial situations, such as a global pandemic, finding ways to make payroll and ensure your employees are taken care of may keep you tossing and turning at night.

However, there is a solution for every problem, and a financing option known as payroll factoring may be just the answer you have been looking for. Below, we’ll explore everything you need to know about what payroll factoring is and how it can help your business continue to thrive.

Payroll Factoring: What Is It?

Payroll factoring is a method by which businesses with outstanding invoices and long net terms can create a steady cash flow earlier than what they would normally expect from their clients. For example, if your net term is 30, or even 60 days, multiple payment periods can hit before you receive full payment from your clients.

Contrary to some beliefs, payroll factoring isn’t a loan, but rather a transfer of invoice from your business to another called a factoring company. The factoring company then supplies you with an advancement, allowing your business to continue operating smoothly.

Payroll Factoring Benefits

1. Avoiding Layoffs
Finding the right people for the right roles is never an easy task. You worked hard to create the team you have in place, and payroll factoring can help ensure that you can keep your team happily employed and motivated to stick with you.

2. Preventing Lawsuits / Additional Debt
Failing to pay your employees for their work will put you at risk for governmental tax penalties, lawsuits from your employees, and accruing additional debt. Payroll factoring ensures you can pay your employees on time and avoid these issues before they even start.

3. Preserve Your Savings
It is common for business owners to take a pay cut or dip into their savings to pay their employees when money becomes scarce. While an admirable decision, payroll factoring makes this particular sacrifice unnecessary.

How Payroll Factoring Works

While different factoring companies will have different policies, the general process is much the same. At Advanced Commercial Capital, we recommend first researching your options thoroughly to find a factoring company that fits your specific needs.

After you find someone whom you trust and can cater to your type of business, you will sign a factoring agreement. The stipulations, fees, and general guidelines will be something you should look over closely to ensure you are getting the best deal possible. After that agreement has been signed by both parties, the payroll factoring process will begin.

Finally, once your client pays the invoice, the factoring company will send you any remaining balances, known as the reverse amount.

Can Your Business Benefit from Payroll Factoring with Advanced Commercial Capital?

If you have a business with employees, then yes, payroll factoring will be beneficial for you, your employees, and the overall success of your business. Advanced Commercial Capital understands the strain that owning a trucking business with unpaid invoices can create, which is why we offer non-recourse freight factoring services.

Non-recourse factoring is designed to give you the maximum benefit possible from a factoring program, as our company bears the credit and collection risk on purchased invoices. This method of payroll factoring means that we won’t charge you if your customers fail to pay their bills.

Payroll Factoring FAQs

Is payroll factoring the same as a loan?
No. Payroll factoring is the sale of your unpaid invoices to a factoring company in exchange for an advance. There is no debt added to your balance sheet and no monthly loan payment.

How fast can I get funded through payroll factoring?
Once your account is set up, most invoices are funded within 24 hours of submission, giving you cash in hand well before your next payroll run.

What does payroll factoring cost?
Fees typically range from around 1 to 5 percent of the invoice value, depending on invoice volume, your customers’ credit strength, and whether the agreement is recourse or non-recourse.

Do my customers know I am using payroll factoring?
Yes. Because the factoring company collects payment directly from your customers, they will be notified to remit payment to the factor. Reputable factors handle this professionally and protect the customer relationship.

To learn more about our non-recourse factoring services, and to see if Advance Commercial Capital is the right support team for your trucking business, give us a call at 855.465.4655 or fill out our online contact form today.

With an estimated 15.5 million trucks operating daily on roads in the United States, it’s important to keep your drivers safe (TruckingInfo.net). Training drivers to be safe and careful while delivering loads is key to growing your trucking business, as it can impact your company’s finances, fuel costs, and truck maintenance expenses.

Here are just a few of the trucking safety challenges for commercial drivers. Even if they seem routine or predictable, it’s important to make sure your drivers remember them.

Large Blind Spots

Limited visibility calls for extra caution in passing and being passed by other large vehicles on the road. Large trucks also need to maintain a longer following distance so they can see all of the vehicles behind them. Cars are often ignorant of the blind spots that trucks have, so it’s up to truck drivers to be vigilant about spotting where cars are moving. Extra side mirrors can be helpful in improving visibility.

Long Stopping Distance

Trucks traveling 65 miles per hour take up to two football fields to stop, so it’s important to have a ‘buffer zone’ in front to protect your drivers and your trucks. The more following distance in front of the truck, the more time drivers have to correct or slow down if other drivers cut in or stop suddenly.

Limited Maneuverability

The turning radius for a truck is 55 feet, so check for smaller vehicles that try to get by when you’re turning. Be aware of the impact a truck makes when accelerating, stopping, and maneuvering between lanes or making a turn. Slowing down significantly for curves and ramps is also a key point to remember – especially with a truck’s higher center of gravity.

Incentivize Safe Driving

To help ensure safe driving, many trucking companies offer small bonuses for driving without any speeding tickets or other citations for a certain period of time. By monitoring driving records – something you’re most certainly doing already – you can identify which drivers have earned bonuses or other rewards for their compliance.

The Financial Benefits of Safe Drivers

Training your drivers for better safety provides benefits not only for drivers, but for your trucking company’s finances.

• Reduced incident rates decrease crash-related liability costs
• Leveraging safety ratings to retain and hire more drivers
• Better productivity by keeping drivers on the road
• Lower insurance costs

Safe driving is good for your reputation, your finances, your drivers and their families. Additional FMCSA tips for CMV drivers can be found at: https://www.fmcsa.dot.gov/ourroads/tips-cmv-drivers.

 

With the increase in use of digital technologies (many that we highlighted last month) unfortunately comes a surge of trucking fraud scams that are being run on companies.

One of the top swindles running rampant these days is deceptive soliciting. A person may call or send official-looking emails or letters posing as a representative from the Federal Motor Carrier Safety Administration. In these letters, they’ll claim to be citing you for various violations and associated fines. The scammers will usually do research on legitimate Department of Transportation regulations, so that their scams seem extremely real. They may ask you to pay extremely high fees, or demand that payment be made through specific wiring instructions. This should send up a red flag and prompt you to investigate the claim. This could be as easy as a call to the FMCSA.

Fraud Prevention for Trucking: What is Being Done?

The Federal Trade Commission has filed a number of lawsuits against companies who’ve scammed thousands of truckers with these deceptive practices. But unfortunately, there are still many people running this particular scam. Your basic carrier information is publically available when you submit an application or update your information with FMCSA. This can leave you open for these fraudulent companies to get your information and target you.

How You Can Avoid Scams:

1. Recognize imposters. Before you send any money or give out information in response to a request, contact the actual agency or business that the request has come from, to determine whether or not it is legitimate. You can also sign up for free scam alerts from the Federal Trade Commission at www.ftc.gov/scams. You can get great tips and advice about scams that are going on through these updates.
2. Know the rules. The FTC will never ask you for money. Also, the U.S. Government does not endorse private businesses or vendors, and the use of a service provider is NOT required by FMCSA. For example, one scam is designed to get trucking companies to sign up for their service claiming to easily pay your annual Unified Carrier Registration fees. However, their “service” will actually charge truckers for more payments and higher amounts than their actual fees should be for the year. Remember: you are NOT required to use third-party administrators to take care of your compliance fees.
3. Report fraudulent practices. You can help stop these deceitful practices and avoid becoming a victim of scammers who target truckers. File a complaint for any aggressive or misleading marketers to the Federal Trade Commission at www.FTC.gov/complaint. You can also report a fraudulent request for information to the Department of Transportation through the Office of Inspector General via https://www.oig.dot.gov/hotline.

For the health of your business, it’s important to become aware of the scams that plague the trucking industry. Check our Facebook and Instagramaccounts throughout the month to learn more about cons you want to avoid.

After analyzing 2015 data, the Federal Motor Carrier Safety Administration reported decreases in both large truck injury crashes and large truck property damage crashes. One reason why these numbers are improving is because of new trucking technology.

Advanced collision mitigation systems, for example, have sensing technology to monitor for crashes and can take emergency action to avoid them. Using this technology can improve truck driver safety on the roads, but technology may also be used to help trucking companies when it comes to earning better profits for their business. You may want to consider some of the following ideas to determine if investing in technology in the trucking industry can help you grow your trucking company.

Trailer Tracking Trucking Technology

This type of system can offer real-time help with loss prevention, warning drivers of high-theft areas, and giving law enforcement data to recover stolen trailers. But it also provides companies the ability to look at the utilization and productivity of their trailers, to see whether or not they’re being maximized in use. The maintenance of trailers is another benefit to trailer tracking, as new systems can attach the maintenance data and records to a specific trailer, creating more consistent inspection plans for companies.

Dynamic Routing Technology

This technology aids efficiency by using real-time traffic and weather information to help drivers adjust to the best possible routes. This can increase profits by allowing trucks to use quicker routes, avoid major collisions, or detour around traffic congestion for more on-time deliveries. And of course, more efficient routes can mean better customer service and lower fuel costs.

While technology hasn’t completely solved many of the problems the industry faces, such as driver shortage and infrastructure issues, there are ways to use technology for your benefit. Taking the time to look at the latest options can help you determine what technologies might help your trucking business grow and succeed.

Throughout this month, our Instagram and Facebook posts will highlight additional technology advances, including transparent and efficient ways to bid for loads that match drivers’ availability and preferences. We’ll also take a look at other software developments that focus on better ways for truckers to make payments for fuel and freight transactions. Stay tuned to ACC on social media to learn more.

Everyone looks forward to pay day. Sadly, it can be very frustrating for small and medium sized trucking companies to deal with customers who don’t pay their invoices on time, or at all. If your trucking business is dealing with this issue, here are proven tactics on how to collect unpaid invoices from customers and tighten up your entire invoicing process.

Take Proactive Steps Before Issuing Invoices

The best collection strategy starts before you ever haul the first load. Setting clear expectations upfront prevents most late payment issues from starting in the first place.

• Establish both credit limits and payment terms with each customer before you begin working with them. Payment terms of 15, 30, 45, or 60 days are common in trucking.
• Use a reliable invoicing system to track when invoices are issued, with automatic alerts that trigger when an invoice is past due.
• Once an alert is received, establish a standard process for collection emails or phone calls to be made immediately.
• Create a straightforward invoice format. Make sure each invoice clearly indicates the amount due including any detention time and lumpers, payment terms, load number, and where to send payment, so there is no misunderstanding.
• Offer early payment incentives for customers who have been consistent in paying their invoices. A 1 to 2 percent discount for payments within 10 days can significantly speed up cash flow.

Issue Accurate Invoices Systematically

• Issue the invoice to the customer as soon as a job is complete. Every day you delay is a day added to your payment timeline.
• Select a specific date each month or day of the week for invoicing, so you don’t get sidetracked with other business.
• Schedule follow-up calls to confirm your invoices were received, and give customers a friendly reminder of when payment is due.

Know Your Invoice Aging Buckets

Tracking invoices by age tells you exactly when to escalate. Most trucking companies use four aging buckets, and each one has a different playbook.

0 to 30 days (current): Invoice is within terms. No action needed beyond a courtesy reminder 3 to 5 days before the due date.

31 to 60 days (late): Send a firm but friendly written reminder immediately. Follow up by phone within 7 days. This is where most collectible invoices get resolved.

61 to 90 days (seriously delinquent): Escalate to a decision maker at the customer’s company. Put payment demand in writing, cite the original agreement, and consider suspending any active work until the balance is cleared.

90+ days (at risk): Send a final demand letter with a hard deadline. If ignored, escalate to a collection agency or attorney. The longer an invoice ages past 90 days, the less likely you are to ever collect it.

Collect on Late Payments Efficiently

• Make calls to inquire about late payments, maintaining a calm and polite tone as you issue the request for immediate payment.
• Establish procedures for when to involve a third-party collection agency, and weigh whether the benefits outweigh the costs (agencies typically take 25 to 50 percent of what they recover).
• Be flexible enough to make term adjustments for customers who consistently pay late. If problems persist, it may be time to consider terminating future business with that particular customer.

When to Fire a Chronic Late-Payer

Some customers cost more than they’re worth. If a customer routinely pays 60+ days late, ignores follow-ups, or disputes invoices as a delay tactic, calculate the true cost: financing gap, staff time chasing them, and the opportunity cost of hauling for better payers. In many cases, walking away frees up capacity for customers who actually pay on time.

Use Freight Factoring to Eliminate the Wait

Even the best collection process can’t force a customer to pay faster than their terms allow. That’s where freight factoring comes in. Instead of waiting 30, 60, or 90 days for payment, you sell the invoice to a factoring company and get paid within 24 hours.

Advanced Commercial Capital‘s non-recourse factoring service gets you immediate payment for invoices and absorbs the credit risk if a customer never pays. That means collection efforts don’t become costly or interfere with your ability to run your business.

Invoice Collection FAQs

How long should I wait before following up on an unpaid invoice?
Send a friendly reminder the day after the due date, then follow up by phone within 7 days. Consistent, early contact resolves most late payments before they become collection issues.

What payment terms are standard for trucking invoices?
Net 30 is the most common in trucking, but shippers and brokers often push for Net 45 or Net 60. Setting terms in writing before you haul the first load protects your cash flow.

When should I send an unpaid invoice to collections?
Most companies escalate to a third-party collection agency after 90 days of non-payment and repeated ignored follow-ups. Weigh the agency’s fee (often 25 to 50 percent of recovered funds) against the invoice value before handing it off.

How does freight factoring help with unpaid invoices?
Factoring gets you paid within 24 hours of submitting an invoice, so late-paying customers no longer stall your payroll or fuel spend. With non-recourse factoring, the factor also absorbs the credit risk if the customer never pays.