5 financial tips for truckers
A trucking business isn't only about getting your goods to the other end. There are lots of extra costs you have to account for - such as maintaining your vehicles - that mean you need to be on top of your finances.
Here are our five top points to think about for a successful financial year ahead.
1) Keep working capital available
You always need money available to invest - whether it be in new trucks or other types of resource. However, sales alone don't always equate to having cash available. Customers that pay late are a common issue for small businesses, and it impacts the amount of money they actually have in the bank to invest in new equipment.
2) Updating your fleet
In the trucking industry, because your expenses are often related to high-value items like vehicles, you really do need considerable cash available in order to keep your business moving forward. When you do start spending, your cash reserves can dwindle quickly.
A solution to this issue is looking at the alternative finance options available. Vehicle finance allows you to borrow money to pay for fleets or individual vehicles, making repayments over time. This keeps most of your cash available for you to invest in other things, while also benefitting from your equipment upgrade.
3) Think fuel economy
Whatever trucks you operate, you'll be topping up with fuel on a pretty regular basis. However, some vehicles are more economical than others. If you're doing long journeys, or filling up a whole fleet of trucks, the savings you make by picking the right vehicle could add up significantly.
Check reviews (don't just rely on what the seller tells you), and also consider the types of journeys your team is making.
4) Prioritise your invoicing and debt collection
Remember, you don't get any money until you invoice, and even then it could still be 30-60 days before you get paid. Getting your invoices out and then chasing them promptly is key if you're to keep your investment options open.
One way some businesses get around this, especially where they don't have an extensive office team, is by using a debtor finance solution. A financier provides you with a percentage of what's owed to you, and you repay when your debtors settle. You can either keep this arrangement confidential, or you can get your financiers to take on your client communications too.
It's also worth doing your due diligence on the companies you work before signing. Make sure they're good payers and have a solid financial history.
5) Use the value of your older trucks to raise cash
If you built up your fleet and have now repaid any loans, one option to consider is sale and leaseback which means you keep your trucks but raise cash at the sametime. The lender will take a charge over the assets.
Working with Classic Funding Group
To learn more about your options when it comes to cash flow and alternative finance, call the team at Classic Funding Group. Our aim is to help businesses succeed.