Quickpay? But it's MY MONEY???? Accounts receivable accounting.

[mndriver]

I hear a lot of folks get tissy about giving a discount for quickpay or even factoring. I won't factor, but I will accept quickpays. The really good ones I have received are a 2% discount in 24 hours. the BEST I have received was 2% for 48 hours, but they sent me notice at 3PM after turning in my POD at 7am that same day. Check was direct deposited the next day. I was impressed.

Anywhoo. Quickpay is nothing new to trucking business. It's rather common in the business world. More commonly referred to as a "discount". You agree to pay early at a discounted amount. Commonly referenced like "Net-2% 3 days". Some places will note it as 2/10 Net 20 or some form meaning 2% discount if paid in 10 days or net in 20 days.
http://www.accountingtools.com/credit-terms-cost-of-credit

invoice discounting.
http://www.accountingtools.com/questions-and-answers/what-is-invoice-discounting.html
You basically are making your cashflow move quickly, but you are financing your Accounts receivables through another company. The terms of that financing I haven't found to be the most favorable to the carrier.

Factoring
http://www.accountingtools.com/factoring-arrangements
similar to invoice discounting, but at a much high cost and rate.

It will make a difference in your accounts receivables how you look at all this. All of them are expensive.
http://www.accountingtools.com/accounts-receivable-accounting

 

[skateboardman]

no matter how you cut it, you still giving a way money. there also is usually a stipulation that if an invoice isn't paid by a certain date the invoice goes up by a certain percentage also.

 

[mndriver]

I never said you weren't wasting money. I am only attempting to show this isn't something unique to trucking. It is a tool recognized by accountants with methods already established to cover them in the books.

And you are correct, take too long to pay, you can add a premium. Others would call it interest.

 

[BigBadBill]

Accounts Receivable financing is used in all industries and isn't unique to transportation. What is fairly unique in our industry is the selling of receivables insurance at extremely high rates. We call it non-recourse. For double the cost you can get almost no coverage but feel good about that security.

 

[Rigjockey]

Try that in a restaurant. Yes the service was fine . However i am willing to pay you a percentage up front. If you want to claim all the costs of the food, Service and tip, I will be back in a month and pony up.

 

[masterchief]

You are right, I do stand by my previous statements but I agree this thread was not the place to get into QP vs factoring. I subsequently deleted my posts in order to focus more on the resources you provided. I must say that I very much respect your experience in this industry and would love to have that discussion more thoroughly with you sometime (sorry on an iPhone and trust me I'm not trying to sell you, but moreso provide you with resources (links, articles ... Again no correlation to my company) about the disadvantages of QP. I'm a very firm believer in how much QP has negatively impacted this industry and would love to see that regulated as a priority before brokers disclose their margins. Always will stand by that.

 

[Injun]

You are right, I do stand by my previous statements but I agree this thread was not the place to get into QP vs factoring. I subsequently deleted my posts in order to focus more on the resources you provided. I must say that I very much respect your experience in this industry and would love to have that discussion more thoroughly with you sometime (sorry on an iPhone and trust me I'm not trying to sell you, but moreso provide you with resources (links, articles ... Again no correlation to my company) about the disadvantages of QP. I'm a very firm believer in how much QP has negatively impacted this industry and would love to see that regulated as a priority before brokers disclose their margins. Always will stand by that.

I undeleted your posts and moved the discussion here:
https://www.truckersforum.net/forum/threads/quickpay-vs-factoring.82782/

Seeing both sides of the coin is important. Both you and @mndriver make some excellent points.

 

[masterchief]

Thank you, I appreciate you letting me post here. I hope i can provide helpful information!

 

[TruckingQueen]

Okay let me clear this up. When you take a Quickpay, the broker has you flagged in their system as such so they know that they can sell you a load for much less than a non quick account because they view you as "cash dependent". I have been factoring with RTS financial for about 3 years now and like their customer service. I no longer worry about the collecting and billing and only pay 3% flat fee to get my cash within 24 hours. They also give me access to their sister companies loadboard. I encourage ya'll to look at their google ratings and google reviews and i can guarantee you that your experience with them would be as pleasant as mine has been.

 

[Ontario Outlaw]

Okay let me clear this up. When you take a Quickpay, the broker has you flagged in their system as such so they know that they can sell you a load for much less than a non quick account because they view you as "cash dependent". I have been factoring with RTS financial and have really enjoyed it. I no longer worry about the collecting and billing and only pay 3% flat fee to get my number within 24 hours. They also give me access to their sister companies loadboard. I encourage ya'll to look at their google ratings and google reviews and i can guarantee you that your experience with them would be as pleasant as mine has been.

Why do you choose to use a factoring service at all?

 

[TruckingQueen]

Why do you choose to use a factoring service at all?

Because I don't want to wait the 30+ days to get paid by not factoring. and I don't want to be jipped on a load for taking a quickpay when it would be 3-5 days to get that.

 

[Ontario Outlaw]

Because I don't want to wait the 30+ days to get paid by not factoring. and I don't want to be jipped on a load for taking a quickpay when it would be 3-5 days to get that.

Yes but you’re still losing money every time you factor

 

[TruckingQueen]

Yes but you’re still losing money every time you factor

I mean kinda but not really. I view it as paying someone to take care of my collecting and billing. I hate having to chase brokers for muh money!

 

[Ontario Outlaw]

I mean kinda but not really. I view it as paying someone to take care of my collecting and billing. I hate having to chase brokers for muh money!

Ok

 

[ironpony]

It's very expensive credit - that's why you want to avoid factoring.

 

[mndriver]

It's very expensive credit - that's why you want to avoid factoring.

And what is it costing you to extend credit to your customers for 45 + days?

 

[ironpony]

And what is it costing you to extend credit to your customers for 45 + days?

That's called managing your cash flow. You'll notice I said "avoid." Even financing your business in a credit card is cheaper than factoring.

 

[tommyh]

I tried going without a factoring company
before I knew it,those brokers was 30-90 days behind paying those bills.It was hurting me.I went with a factoring company and let those people deal with those brokers.I used to use quickpay a lot with certain people.I can do credit checks with this factoring company.That comes in handy.
since I started this new gig,the company pays me every Friday..Soon,I will leave the factoring company since I have no more use for them

 

[mndriver]

That's called managing your cash flow. You'll notice I said "avoid." Even financing your business in a credit card is cheaper than factoring.

Pretty easy to spout when you're under the protection of a lease that pays you in 15 days or less.

 

[ironpony]

Pretty easy to spout when you're under the protection of a lease that pays you in 15 days or less.

Who dat??