Trucklogics recently integrated brand new features, and we wanted to take a detour from our Business Management Series and head over to the magical world of factoring vs. quick pay. We will stop and take a look at fuel advances near the end to capture those special memories of our trip together. And don’t worry, the cheesiness will be left in this introduction. Let’s get to it!
Freight Factoring vs. Quick Pay
Freight factoring, as most of you know, is an option to get paid for your invoices now, rather than later. Most factoring companies provide payment within 24-48 hours, but it does come at a price. The percentage of what the factoring company gets to take off the top is what you really need to pay close attention to. Percentage rates vary among factoring companies, so really the best way to choose one is to talk to someone that has done factoring and get their take on it.
Quick Pay is an option provided by freight brokers and usually offers comparable rates to factoring companies. If you work mainly with a broker, then it can be more convenient to use this option to receive payment faster. Again, pay attention to the percentages that they take off the top, and remember the faster you want payment, the higher the percentage.
The differences start to become apparent in the additional fees and services. Also, a big difference can be seen in how you receive your payment – via card, check, or direct deposit. With quick pay, you might not have as many additional fees as you would if you used a factoring company. But factoring companies do offer more additional services such as fuel advances and special discounts.
From countless hours of research and a deep fall down the quick pay/factoring rabbit hole, it’s difficult to determine if one is actually better than the other. Both options have their pros and cons and neither is a ‘loan’ so you never have to pay anything back later. It really comes down to what option is available to you and how much money you’re willing to part with.
How Fuel Advances Comes into Play
Just like your factoring and quick pay options, fuel advances should also be used very carefully. Many factoring companies provide a fuel advance as an add-on to cover fuel costs and other expenses related to a haul. If your funds are a little low, this could be a good option to get you through for a very short amount of time. Fuel advances are expensive because they are processed quickly and they are a bit risky for the company providing them. If something happens to the load the company could lose money. If you are thinking of using a fuel advance, do the research or talk to a buddy that has done it before. Going blind into all this stuff isn’t the best idea. There are a lot of hidden fees that could take you by surprise. The more you know about the percentages and additional fees associated with fuel advances, the better off you’ll be able to plan how to make up for the financial loss.
TruckLogics’ Factoring Company Invoice Feature
TruckLogics has tons of great features to accurately manage your finances so the options above aren’t your only choices. But, things happen in the trucking business that make factoring and quick pay shining beacons of light to help you out of a jam. TruckLogics integrated a factoring feature for invoices so you can be a financial tracking master. To properly show it off, we made a video! Gotta love technology, right?
We Want to Hear From You
If you have any questions about TruckLogics or would like to schedule a personal demo, give us a call. You can contact the TruckLogics Crew via phone: 704-234-6946 or email: [email protected].