Oil and gas distributors cover a large area – supplying houses, businesses, and gas stations with the fuel necessary to keep people warm and to keep our vehicles and equipment running. Yet to keep supply lines running, oil and gas distributors that operate mid to down-market need to maintain a strong cash flow.
Payment Lag and Distributors
When oil and gas distributors make deliveries to other businesses and gas stations, they issue invoices with payment schedules of 30, 60, or even 90 days. During that time, the distributors still need to purchase oil and gas to make other deliveries, pay drivers, perform maintenance on vehicles, and cover other overhead expenses. Even if there are a lot of orders in a given period, cash flow can become tight while oil and gas distributors are waiting for payments. We are currently in March, but there are some distributors that are still waiting on payment from deliveries made in February and January. This situation can cause distributors to miss financial obligations.
Eliminating Payment Lag for Oil and Gas Distributors
Eliminating the lag between payments can accelerate cash flow for oil and gas distributors. To do this, distributors take advantage of factoring services. Factoring allows distributors to exchange their unpaid customer invoices for cash, which is made available within 24 hours. For the customers, very little changes. They still have to adhere to the same staggered payment schedules. When they make payments, it goes directly to the factor. For distributors, factoring provides improved cash flow and eliminates the lag between payments, as well as the need to perform collections. The increased cash flow allows distributors to take on larger accounts, expand their delivery radius, make payroll, and cover overhead.
Get the Factoring Services Your Distribution Fleet Needs
Single Point Capital offers fast and comprehensive factoring services to oil and gas distributors nationwide. We will convert your invoices to cash and make funds available to you within a single day. We also provide tools so you can check up on the creditworthiness of your clients and manage your account. To accelerate your cash flow and eliminate the lag between payments, contact the professionals at Single Point Capital today.