There’s considerable pressure on transport businesses to manage finances carefully to ensure you end up with a profit.
At CFO On Call we understand the issues affecting your ‘bottom line’.
Here’s some ‘Key Drivers of Success’ in the Transport/Freighting Business:
- Laser focus on Cash-flow and Risk: Need to ensure businesses have the most effective and affordable financing terms and products. Many transport/freight businesses are using Cash Factoring products (where a % of the invoice is paid upfront) but these can be very expensive.
- Are your business financing terms optimised? Do you have the right business insurances in place to mitigate risks?
- Good Systems: Integrated IT systems/solutions that allow individual job management, route management, invoicing, tracking of financials at a job/route level, labour cost management etc.
- Does your business have the right system in place to help you run your business?
- Laser focus on Efficiency/Optimisation: Freight/transport industry is extremely competitive with a high level of fixed costs. In order to complete and optimise profits, businesses need to understand what their key metrics are and measure themselves against these metrics on a regular basis (things like, labour expenses to turnover, truck expenses to turnover, gross margin by job, gross margin by route, fixed costs to turnover, labour utilisation, truck utilisation for each direction, % fill by route or job etc).
- Does your business have regular Dashboard/KPI reporting?
- Do you understand how your business’ KPIs compare against benchmarks?
- Do you understand what the true profitability of each route is (including fixed costs etc)?
- Does your business have the right mix between use of own and contracted trucks to ensure maximum utilisation, especially during peak periods?
- Growth: Does your business have sufficient cash flow to facilitate your growth ambitions?
HOW CAN CFO ON-CALL HELP?:
