As the trucking industry continues to see growing economic demand, many companies are seeking more cost-effective ways to do business. Drivers are at the backbone of your daily operations, and it’s important to keep them satisfied and loyal to your business.
The truck driver shortage is an area of concern for many companies, especially small- and mid-sized ones. Empty trucks compromise their ability to move goods and make money. Trucking companies need every advantage to help drivers overcome challenges and eliminate some of the obstacles out on the road.
Those efforts can be compromised when a company routinely waits 60 to 90 days or even longer to get payment from clients. That lag time can delay maintenance and repairs on company trucks, and create problems meeting employee payroll.
That’s when companies need to seriously consider factoring. By selling its accounts receivables to a third party, the company gets immediate access to funds and can address other operating costs.
Here are three ways that this increased cash flow can improve driver retention.
1. Faster Repairs and Maintenance
Funds that are immediately available to your company can be spent as needed for repair and maintenance costs. Trucks remain in good running condition, which means drivers can feel safe and secure while they’re out on the road.
2. Payroll Funding
Making payroll is critical to retaining drivers and ensuring that your freight gets delivered on time. Factoring turns your outstanding invoices into cash and can be used to issue paychecks on a consistent basis. Drivers don’t have to worry about anything except getting their job done.
3. Back Office Relief
The back office also has a burden lifted, with the factoring company ready to handle collections, credit checks and billing. That leaves time to pursue new business while also taking care of current customers.
It’s important to choose a factoring company with extensive experience in the field.
WEX Fleet One factoring services are backed by a trusted financial company. A strict vetting process of shippers in is place to help companies work with reliable customers.
That is a formula for growth – good for the company and good for drivers. With a factor to keep cash flow steady, and a customer base that can be counted on, the opportunity is in place to expand or add incentives that will aid in driver retention. It’s a circle of success: Factoring keeps your company on track, which keeps drivers on board who help the company establish a solid reputation, which can lead to more growth, which can attract more good drivers.