During these tough financial times, many transportation companies have turned to methods of keeping steady cash flow, including QuickPay and freight factoring.
But what is the difference between the two, and how can you decide which is the best for your business? Ultimately, the choice is up to you, but it helps to have all the information on both before making your decision.
Here’s all you need to know about QuickPay, invoice factoring, and the difference between them.
What is QuickPay?
QuickPay is a payment option that offers freight carriers a faster way of getting paid from brokers. Generally, QuickPay can take between two and five days after completion of a load.
Not all brokers offer a QuickPay program. If yours does, remember that the broker determines the terms and costs. One broker might pay in two days and take 2% out, while another might take five days and charge 5%.
QuickPays are quicker than waiting. If you are doing well financially and aren’t worried about your cash flow, QuickPay is an excellent way to get paid faster occasionally.
What is freight factoring?
Freight factoring allows transportation companies to focus on running their business while enjoying a steady flow of cash. Freight factoring companies send transportation companies an advance worth around 85% of the unpaid invoice. The trucking company will then focus on what they do best while the factoring company reaches out to the client to get them to pay the invoice ASAP.
Once the client pays the invoice, the factoring company returns the rest of the unpaid invoice and takes a small cut for themselves. Both companies win!
What is the difference between Quickpay and invoice factoring?
Here are the top five differences between QuickPay and invoice factoring you should know before deciding which option is right for your company. (Although, it’s more than possible to use both!)
- Typically, payments via QuickPay take longer than freight factoring. QuickPay payments can take anywhere from two to five days, whereas most factoring companies pay within one business day or sooner.
- Factoring offers carriers more flexibility than does QuickPay. Brokers only offer QuickPay on their terms. With invoice factoring, you can choose which invoices to factor, meaning that you can still use QuickPay on some loads and factoring on others.
- Factoring companies don’t only offer advance funding, but also a backend team to support your business. You’ll get services such as invoicing, collections, broker credit checks, fuel card discounts, and fuel advances.
- Factoring companies offer client portals, allowing you to access your account and check the status of your funding and other benefits.
- QuickPay is used on a case-by-case basis. Most of the time, you don’t sign an exclusive contract with a broker when using QuickPay. However, some factoring companies allow clients to factor only the invoices they want to factor.
Let us help you find the best trucking factoring company for your freight business!
If you want to give your trucking company a boost, get started with freight factoring today! Head over to our ratings so you can see the best freight factoring companies for trucking businesses you should consider signing a contract with. If you have further questions about freight factoring rates or the best factoring company for you, contact us today, and we’ll assist you!