Dump truck factoring companies: tickets, time sheets and contractor terms

Hourly vs per-ton invoices

The same week, billed two ways, and what a factor needs for each. EXAMPLE

Either way, the invoice should list the job, the dates and the totals so a factor can match them to the tickets. Rates are made up for the example; real dump truck rates vary by region, material and haul distance. Price your own work with the dump truck hourly rate calculator.

What factors need from dump truck owners

• Signed tickets or time sheets for every load or day on the invoice.
• Customer details: the contractor or supplier, job site and any purchase order or job number.
• Customer approval: some factors confirm with the contractor that the work was accepted before funding.
• Your company documents: W-9, insurance and, for interstate work, operating authority.
• A clean lien check: no lender already holding a claim on your receivables, such as an equipment lender.

Retainage

On many construction projects, the owner or general contractor holds back part of each payment, called retainage, until the project is finished and accepted. If your invoice is subject to retainage, part of it won't be paid for months. Factors usually won't advance against the retained part, and some won't buy invoices with retainage at all. Know which jobs carry retainage before you count on factoring them, and invoice retainage separately when it is finally due.

Contractor credit and payment terms

Contractor payment terms vary widely: some pay in 15 days, some in 30, and some wait until they are paid themselves. A factor approves each customer based on its credit and payment record, so large, established contractors are easier to factor than small ones with thin records. Ask the factor to check your main customers before the season starts, and keep factoring the ones it approves. Factoring is priced on those customers' credit. Source

Seasonal cash

In much of the country, dump work slows or stops in winter. Spring brings a rush of jobs, and with it fuel, tires and repairs paid before the first invoices are. Factoring helps most in that spring ramp-up, when invoices pile up and contractors haven't paid yet. In the off-season, fewer invoices mean less factoring, and an agreement with a monthly minimum can charge you for the quiet months. Choose terms that fit the slowest month, and set aside part of each busy month's advances for the winter.

Local work, hours and licensing

Most dump work is local, and many drivers qualify for the short-haul hours exception by staying within 150 air-miles and returning the same day. Source Most dump trucks are single units rated over 26,000 lb, which makes them Class B CDL vehicles Source, with drug and alcohol testing to match. None of this changes how factoring works, but it does shape the costs factoring helps you cover.

Choosing a dump truck factoring company

1. Ask whether it factors construction and material invoices, not only freight bills.
2. Check which of your contractors and suppliers it approves.
3. Ask how it handles retainage and customer approval.
4. Avoid monthly minimums you can't meet in winter.
5. Ask how tickets and time sheets are submitted from the job site.
6. Get every fee in writing, then cost out a typical spring week.

One industry article from a factoring company puts recourse factoring at about 1.5% to 3% per invoice. Source RTS Financial states it advances more than 90 percent within 24 hours Source and that carriers can upload invoices and get paid the same day. Source

Tickets: the habit that gets you paid

Most dump truck factoring problems are ticket problems. Get every ticket signed at the dump site or scale, photograph it before it goes in the door pocket, and total the day's tickets before you leave the job. At the end of the week, match the tickets to the invoice line by line. A factor can only fund what the tickets prove, and a contractor can only approve what it can check.

Fuel, tires and the busy season

Dump trucks are hard on equipment. Short hauls, loaded climbs out of pits, rough job site roads and long idle times in loading lines all add fuel and wear. In the busy months, a blown tire or a hydraulic repair can cost as much as a week of invoices, and it lands before contractors pay for the work already done. That is the moment factoring earns its fee: the truck goes back to work the next morning instead of waiting for a check. Keep a running list of what each week costs to run, so you know how much of each advance is already spoken for before it arrives.

Disputes and short payments

Construction invoices get disputed: a load counted twice, a ticket with the wrong weight, an hour the foreman doesn't remember. A disputed invoice may not be funded, or may come back to you if it was. Settle disputes quickly with the tickets and photos you kept. If a contractor short-pays, find out why before the next job, and agree in writing how loads will be counted and approved from then on. A five-minute call at the start of a job prevents a week of arguing at the end of it.

Electronic tickets

More pits, plants and contractors now issue tickets electronically instead of on paper. That can make factoring faster, because the record already exists and can be exported, but only if you can get a copy. Ask each customer how you will receive ticket data, and whether the factor will accept an export or a portal screenshot as proof. Keep your own record of loads and times each day in case the systems disagree.

When not to factor

• Your main customers pay within two weeks and you have a reserve.
• Most of your invoices carry retainage the factor won't advance against.
• Your customers are small contractors the factor won't approve.
• The only agreements offered carry minimums you can't meet in winter.

In those cases, a line of credit for the spring ramp-up, or quick pay from customers who offer it, may cost less. See is factoring worth it.

Growing from one truck to several

Adding trucks multiplies tickets, time sheets and invoices. Give each driver the same ticket routine, and have one person match tickets to invoices each day before submitting them. Ask the factor for reports by truck and by customer, so you can see which jobs pay quickly and which tie up cash. Volume usually brings better pricing, so revisit your rate as the fleet grows. See small fleet factoring.

Hauling for brokers and material suppliers

Some dump trucks haul through brokers who match trucks to contractor jobs, or for material suppliers delivering from pits and plants. Those customers may pay on different terms from contractors and are often easier for a factor to approve. If you mix work for brokers, suppliers and contractors, ask the factor to check each type of customer.

Dump truck work and dispatch

Factoring covers the cash; keeping the truck working every day is the other half. Our dump truck dispatch looks for steady hauling for contractors, suppliers and brokers in your area and calls you before booking. Factoring is never required to work with us. See dump truck dispatch and the full guide to freight factoring.