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Cash Flow Success Drives Trucking Company Risks and Rewards

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Cash Flow Success Drives Trucking Company Risks and Rewards


Apex Experts: Joseph James Offers Financial Tips to Keep the Cash Moving

Cash flow is crucial to all businesses. It’s especially important for independent trucking companies because they need steady revenue to keep hauling and growing. Joseph James, Chief Financial Officer for Apex Capital, offers 20-plus years of experience in the finance world. He understands how small-to-medium size trucking companies succeed by balancing cash with risks and rewards. He has financial tips for your trucking company.

Does capital management matter?

Capital management is a huge part of the success of a trucking company. The company could be starting up or maybe it’s already a year old. Poor working capital management is one of the main reasons that company will fail.


Joseph James

That means picking the right partner in those early days is important. Does that partner have the expertise to help you run your business? Apex Capital does and has been helping trucking companies stay successful for 26 years. Has your partner been around long enough? Have they seen different business cycles, the good times, and the not so good times? Have they seen a recession or high fuel prices? Have they seen low fuel prices? Those experiences are very important for a company that is going to be your business partner. Apex has seen that and more.

Also, is your partner going to be transparent with you about fees and charges? Can they give you a statement at the end of the year or even periodically that walks you through what fees you paid and the benefits you got from them? Did your partner do what they said they were going to do? What about a fuel card? Do they offer one? Can they walk you through what you saved? You also want a partner that will be there for you beyond business hours. Ask your partner how they have been successful and see if their answer lines up with your values and the culture you’re trying to build in your company. That goes a long way to seeing if that partner is the right fit.

How can risks and rewards help a trucking company?

Your balance sheet is going to tell you how much risk you could take on the health of your company. Obviously in the early days of your trucking company, there’s not a lot of risks you can take. There’s not a lot of capital to really take those risks. But risk does breed reward, so that is always something to think about. And again, having the right partner to help you manage that risk is important.

You want to take thoughtful risks and have a great partner who can walk you through that with decades of experience backing up their expertise. At Apex, we’re fortunate to have 26 years of that kind of experience for you to lean on. You always want to quantify the risk and the severity of the risk. And before it happens, make sure you know exactly what the risk is. What are the consequences of the risk? Some risks you know what happens if you fail. If the cost is, say, $1,000, ok, I can absorb that. Some risks are extremely hard to value. For a young business without a robust balance sheet, those are the ones you need to stay away from. You must be able to quantify the risk and detect the severity of it.

Apex can help you quantify those risks very well based on all we have learned through the years. And where does that put your company? If that risk is an existential threat to the solvency of your business, you can’t take it.

Is the bottom line the most important financial factor?

Yes but keep this in mind – plenty of profitable businesses have gone bankrupt.


They grew so fast they couldn’t generate the cash. For instance, they get a new client, add trucks to deliver the business, but then the client wants to pay in 45 to 60 days. We know what that can do to a business in terms of needing cash for payroll, insurance, truck payments, and fuel. Those are consumable costs of the business that can put you out of business if you can’t manage them.

So yeah, people can talk about net profit all they want but if they can’t generate the cash in a timely manner, that’s what happens. That’s the bottom line – create the cash.

How does a trucking company maintain cash flow, keep it steady, and incremental?

The critical point here is the factoring relationship. Is that factoring company transparent, or do they surprise you? How well do they communicate? Do they do it with a sense of urgency?

Also, you know how much work you need regarding back-office. Could someone help you with that like we can here at Apex? We deliver on the back-office work with collections, support, and auditing. We make sure these things are squared away when they go to your customers, so you get payments. In Apex’s 26 years, we’ve learned a lot of lessons, so we’re a great coach.

Also, really focus hard on getting that operating leverage headed in the right direction. Build the discipline around fuel card management for all your drivers. The TCS Fuel Card, that’s the one that’s going to save you the most money.

Are the good times a time to let up or keep building?

That’s the time to really get better, make concerted efforts, and have a lot of discipline around understanding what the drivers of the business are and not just appreciate higher profits. Enjoying higher profits is the time to learn how much of it is me as an operator being efficient and how much of it is tailwinds and things I can’t control. Those tailwinds can over time turn into headwinds. Stay really focused during the good times and you’ll be prepared for the headwinds.


Managing cash flow can help you turn risks into rewards. Apex factoring can help you with fast cash, tools, services, and know-how to keep your business successful. Become an Apex factoring client today! Visit our website or give us a call at 855-369-2739.