Cash Flow and Profit in the Freight Industry

Murray Pratt Blog, Business Insights, Freight Broker, Trucking Leave a Comment

It’s the lifeblood of the trucking and freight brokerage business.

Yes, you have to make a profit. Sometimes, things are moving so quickly in your trucking or brokerage operation, that you must wonder at the end of the month if the money that came in from your customers was more than the money that went out to drivers, carriers, lumpers and other suppliers. And while you could have made a profit in a particular month, you could find yourself in a cash negative situation.

You just hope that you quoted and sold the business at the right margins, and that the paperwork was done and delivered to your customers for payment. Many companies don’t want to wait, or worry, about sending out invoices to customers. Instead, they choose to send it to a Factor – foregoing margin and profit in order to maximize cash flow. They simply don’t want the headache of the paperwork.

Running a Carrier business, or running a Brokerage business, is half-part Operations, and half-part Administration. And for most businesspeople, it’s tough to wear both hats – more profoundly, it’s tough to be good at both parts. The same person who likes the ‘to and fro’ of Dispatching and Selling is not necessarily the same person who is good at keeping the books, maintaining the cash flow, and monitoring profitability of a company. Even if they do both, one is done enthusiastically while the other is a chore.

Trucking software, and freight broker software, provides companies with the foundation and tools necessary to track and maintain cash flow and profitability in the business. The ability of trucking software, and freight brokerage software, to wrap around the ‘load’ itself and link together the selling & dispatching with the Invoicing & payables associated with a load ensures that you can monitor income while meeting your obligations to suppliers. In essence, a trucking software and freight brokerage software system allows you to ‘make ends meet.’

And hopefully, if you have ‘cast the die’ correctly – it’s been sold at good margin and costed appropriately, so that there is some ‘meat’ left in the middle for you. Something called profit that lets you know you are making progress just beyond moving cash in and out of your business.

You can thank your trucking software and freight brokerage software for that. It’s an engine for positive cash flow and profit that keeps a business running.

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