Sponsored: How small and medium sized haulage firms can maximise cash flow during the COVID-19 pandemic
How small and medium sized haulage firms can maximise cash flow during the COVID-19 pandemic As the country emerges from strict lockdown, businesses are considering new strategies for sanitisation and social distancing. While haulage firms who have been operating throughout the pandemic are facing different challenges surrounding dropping volumes of goods and the strapping of cash flows.
Disruption of supply chains and the restriction of movement of goods and people have created enormous pressure on the industry. Small firms in particular are suffering from the hangover of the past few months as they make up over 85% of the haulage firms in the UK. While government grants have been helpful for some, many companies have not felt able to take on more debt, particularly when the future still feels uncertain.
Managing cash flow is essential to the hauliers. So, what can small and mediums firms do to stretch their cash flow and survive the next 6 months and beyond? Some hauliers are saving up to GBP4000 per HGV driver annually with new and emerging technology such as Avail.
These savings can be used to free up resources, invest in the fleet, or keep in the bank to protect against future challenges. Avail enables hauliers to search for and sign up temporary drivers through a user-friendly app, that uses intelligent algorithms to match HGV drivers with jobs based on haulier needs. Avail also offers solutions for their haulier clients, such as a monthly invoice with 30 extra days for payment.
Avail's CEO, Erin Short says: " We reduce or remove agency fees from haulage companies using technology. The financial impact of engaging with our platform and using it to control your staff work pattern is game-changing. We simply offer everything a normal agency does and more, at a reduced cost."
Avail are currently offering a free trial of their app, sign up here.
- Carefully audit clients, and your own business
Now is not the time to be lured into unattractive or extended payment terms. If cash flow is key, haulage firms need to be more stringent than ever about how and when payments will be made. Direct conversations with potential clients and review of contracts should ensure that profit doesn't turn to loss.
Don't forget to turn the tables on your own business too. You cannot control what you haven't measured. Carrying out an up-to-date calculation around exactly what working capital your business has right now is an excellent place to start. Then look at what arrangements can be made to cut down payment lags or overdue invoices.
Unfortunately, this situation isn't going away overnight so maintaining gross income while conserving cash is critical to staying resilient over the next few months.
- Be ready for action
As different industries 'wake up' in phases, projections for haulage firms will continue to be impacted. Having ready access to temporary drivers means haulage firms can be agile and jump back into action, without the commitment of salaried employees. Platforms like Avail will be critical in providing a flexible workforce to respond to varying demand for drivers, without any additional recruitment fees.
Meaning that the haulage firms who embrace technology will be first out of the starting blocks.
- Rent out your stood lorries.
Just because work is at a standstill, it doesn't mean your fleet needs to be. Get your lorries on the road and make money by renting them out. With uncertainty impacting almost every industry, businesses from all sectors are looking for flexible and cost-effective ways to transport goods, and demand of rentals is expected to increase.
Before Covid-19 there was already an estimated 17 million vehicle rental transactions each year, involving more than 10 million customers, and the British Vehicle Rental and Leasing Association (BVRLA) has informed the government that the vehicle rental industry is an integral part of the supply chain across NHS, police, social care and central and local government.
- Speak to your neighbours, we are all in the same boat
One of the things we have heard alot of in the past few months is: "we are all in this together".
And, even though our individual circumstances are all unique, as an industry, we are all in the same boat.
Now is the time to look to your neighbours, competitors and friends, see how they are taking on this crisis and find ways to help and support each other.