Transportation Management Systems (TMS) are at the heart of every freight broker’s tech stack. They help brokers streamline their operations, improve efficiency, and grow their brokerage.
But, not all TMS platforms are created equal. Some are made for specific freight sectors, while some offer a broader feature set for brokers who need to do it all. But with so many TMS options out there, there’s sure to be one that fits every broker’s needs. Say goodbye to manual spreadsheets and outdated systems and hello to a TMS transportation software that will help you scale.
Here, we break down some of the best TMS software for brokers, including their key features and the types of brokerages they best serve.
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Scaling your fleet trucking business is no easy feat, especially if you want to scale sustainability (as you should). We’ve seen too many horror stories about fleets that grew too quickly and then went out of business, such as Surge and Convoy.
But, cautionary tales aside, there are a lot of growth opportunities for fleets and it all comes down to proper truck fleet management. We may not be seeing a complete market upturn yet, but there are plenty of signs that things are on the upswing for fleets. Sustainable growth is possible.
Let’s look at ways to manage your truck fleet and scale sustainably through smart cash flow strategies, efficient operations, and a productive team of employees and drivers.
When it comes to scaling your fleet trucking business, accurate financial planning is key. A few things to consider when approaching financial planning for your fleet is your budget, financing, and cash flow.
One of the first things to do when planning to scale your fleet sustainably is create a growth budget that takes into account all of your costs.
These costs could include acquiring new trucks (including their purchase prices, leasing options, and maintenance requirements and expenses), increased insurance coverage, and hiring and training new drivers. You may also budget for upgraded technology, such as a fleet management software to make your operations more efficient as you grow.
The next step when thinking about scaling your fleet is to consider financing. There are lots of options available to fleet owners, including loans, factoring, and lines of credit.
Loans
Loans provide a lump sum of funding, but they require regular payments, which might impact your cash flow as you scale.
Factoring
When you factor invoices, you sell your invoices to a fleet factoring company to improve your immediate cash flow. Factoring rates differ based on your needs and while factoring may impact your overall revenue, the fees are often a small price to pay for the flexibility it affords fleets.
Lines of Credit
Lines of credit offer flexibility because you can spend more cash now, but they come with variable interest, often as high as 14% for newer fleets.
Weighing freight factoring vs a line of credit is a common consideration for fleet owners as they both provide access to cash flow, but when looking at the pros and cons of each, factoring is often a better choice for fleets to avoid variable interest rates, tighter credit conditions, and higher borrowing costs.
Lastly, you will need a way to manage cash flow as you grow to avoid financial strain. Your detailed budget and financing will help with managing cash flow, but you will still need to look at the data to accurately project your revenue and expenses.
To avoid any future financial hiccups, make sure to account for potential fluctuations in things like fuel costs, maintenance, and driver wages. Monitor your cash flow closely to ensure that as you grow, you aren’t jeopardizing your ongoing operations. Some fleet owners may even consider setting aside a reserve fund for any unexpected costs.
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2024 has brought a mix of challenges and opportunities for trucking companies across the nation. From economic uncertainty to rising fuel costs to cautious optimism in the coming months, there’s a lot to think about as a fleet owner or broker.
The end of the year is right around the corner and there’s no better way to end 2024 than by setting some powerful short term goals to carry you through Q4. Here, we share some short term goals you could consider for your trucking company and provide some actionable steps to progress towards them. Here’s to a great end-of-year rally!
The goal: Conduct a pricing review to ensure alignment with market trends and close Q4 with improved margins.
A great end-of-year goal to set your sights on is to optimize your freight pricing to maximize revenue. We’ve seen freight pricing trends go up and down and just recently, some companies have even secured rate increases. For example, XPO negotiated an 8% rate increase from a year ago and ArcBest finished Q2 with a 5.1% increase in rates. With this in mind, optimizing your freight pricing strategy should be a top priority for the rest of the year.
But optimizing freight pricing is easier said than done, right? Start by conducting a comprehensive review of your current pricing strategies to ensure that they align with current market conditions. Then, look at where you can renegotiate contracts or shift your focus to higher paying lanes.
Another option is to implement dynamic pricing models, especially as we approach the busy holiday season. Dynamic pricing models allow you to create freight pricing that adjusts as the market changes.
Actionable steps
The goal: Reduce Days Sales Outstanding by 10-15 days by streamlining invoicing processes and conducting a comprehensive financial review by end of Q4.
Effective cash flow management is essential for any successful trucking company, especially at year-end when costs can rise, and cash can become tight. To set your business up for success in 2025, conduct a thorough end-of-year financial review focusing on cash flow, outstanding receivables, and areas for improvement. Proper financial planning for brokers and fleet managers is crucial to sustain growth and maintain financial stability.
During your review, identify opportunities to reduce the time it takes to get paid. This may involve tightening up invoicing processes, implementing quick-pay discounts, or leveraging technology to send accurate invoices promptly. If your review indicates that reducing DSO could significantly improve liquidity, consider partnering with a factoring service to get paid on invoices immediately.
At Denim, we offer a number of benefits outside of just factoring. Our solutions include customized financial reports, transparent pricing with no hidden fees, and dedicated support to help you understand and enhance your company’s financial health.
Actionable steps:
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Cash flow is the lifeblood of every fleet operation. Without it, covering essential expenses like maintenance, fuel, and repairs becomes a challenge. When cash runs dry, delivering the top-tier service your fleet is known for could be at risk.
Many fleet owners turn to freight factoring to ease their cash flow concerns, but not all factoring is the same. There are two main types: recourse and non-recourse. Knowing the difference between them can help fleet owners better manage risks, control costs, and keep their operations running smoothly.
Non-recourse factoring is a financial arrangement where the factoring company assumes the risk of non-payment from the fleet's customers, typically brokers. This type of factoring is particularly appealing to fleet owners who are concerned about the possibility of non-payment or encountering a double-broker scenario, where payment becomes complicated or delayed.
Risk Mitigation
The primary advantage of non-recourse factoring is that it shields your fleet from the risk of non-payment due to bankruptcy. If a broker defaults, the factoring company absorbs the loss, not your fleet.
Simplified Accounting
With non-recourse factoring, you can manage your cash flow more effectively, knowing that your revenue is secured. This allows for easier financial planning and less stress about potential losses.
Higher Fees
The peace of mind that comes with non-recourse factoring comes at a cost. Non-recourse factoring companies charge higher fees to compensate for the increased risk they assume.
Stricter Credit Criteria
Non-recourse factoring is typically only available for brokers with strong credit profiles. This may limit your ability to use this option if your customers don't meet the stringent requirements.
Doesn’t Cover All Non-Payment Situations
Most non-recourse factoring contracts only protect your fleet from non-payment due to bankruptcy or brokerage closing. It does not apply to situations like double brokering or disputes.
Non-recourse factoring is most beneficial for fleets that prioritize risk avoidance over cost. If your fleet frequently deals with new or smaller brokers, or if you've experienced a client bankruptcy in the past, this option can provide the security you need to keep your operations running smoothly.
Recourse factoring places the risk of non-payment back on the fleet owner. While this might sound less appealing at first glance, there are significant advantages that make recourse factoring an attractive option for many fleets.
Lower Fees
Because the factoring company is not taking on the risk of non-payment, recourse factoring typically comes with lower fees. This can be a major advantage for cost-conscious fleet owners who are confident in the creditworthiness of their customers.
Flexibility
Recourse factoring tends to have more lenient credit requirements, making it accessible to a broader range of customers. This can be especially useful for fleets that work with a mix of brokers, including those with less established broker credit histories.
Risk Retention
The biggest downside of recourse factoring is that your fleet is responsible for any unpaid invoices. If a broker fails to pay, you’ll need to cover the cost or negotiate with the broker directly.
Could Lead to an Increased Workload
With the potential for unpaid invoices, recourse factoring can lead to additional administrative work, as your fleet may need to follow up on payments for aging collections.
Recourse factoring is a great fit for fleets with a strong handle on their customers' creditworthiness and those who are willing to take on a bit more risk in exchange for lower fees. If your fleet operates with long-standing, reliable brokers, recourse factoring can be a cost-effective solution.
As you can see, both non-recourse and recourse factoring offer their individual benefits and drawbacks. Here are a few more key differences between the two:
When deciding between non-recourse and recourse factoring, consider the following:
Choosing between recourse vs non-recourse factoring depends on your fleet’s specific needs and risk tolerance. While non-recourse fleet factoring offers protection against non-payment, it comes with higher costs. Recourse factoring is more affordable but may carry more risk. At Denim, we offer recourse factoring because it gives both us and our customers more flexibility to grow their fleet and cut costs. If you’d like to learn more, request a demo today!
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Making timely payments as a broker is more than just important - it’s a necessity. On-time freight payments directly impact your credit score, carrier relationships, reputation, and even the number of follow-ups you receive from carrier factoring companies.
On the other hand, late payments can negatively impact your freight broker credit, make carriers less likely to work with you again, and negatively impact your reputation in the industry.
By implementing the best practices we’ve outlined below, you can streamline operations, build trust with carriers, and potentially open new revenue streams. These are our top five essential freight payment best practices that every broker should start implementing today.
Getting into good habits when paying carriers is a cornerstone of building a successful brokerage. This means prioritizing paying your carriers first, before paying yourself.
Many brokers might think this doesn’t matter, because they think there will always be enough to pay their carriers. This unfortunately is where many brokers run into trouble, because when they get into the habit of paying themselves first and run into a cash crunch, it can leave carriers hanging with delayed or unreliable payments.
Paying your carriers first helps maintain healthy relationships and avoids any possibility of business disruption due to delayed payments. By ensuring carriers are paid promptly, you guarantee continuous, reliable service from carriers, prevent debt spirals that can quickly derail your financial stability, and build a reputation as a trustworthy partner in the industry.
To implement this effectively:
QuickPay has quickly become one of the most popular methods for payment among carriers. These programs give carriers the ability to be paid within 24 hours after delivering a load, making it hugely popular among carriers who are used to 7-14 day payments (or longer). Carriers who want to be paid through QuickPay are often reluctant to work with brokers who don’t have it available, making it more difficult for brokers to find reliable carriers if they don’t offer a QuickPay option.
While QuickPay is great for carrier retention, it does come with a few caveats. First, it should only be offered to reliable carriers you’ve worked with before, or those vetted through programs like MCP. This helps reduce the possibility of fraud and misuse.
Brokers should also consider charging a fee to carriers based on the speed of payment. This can range from 1-3% of the invoice amount, depending on how quickly the payment is made, giving brokers a new revenue stream.
Benefits of a QuickPay program include:
When implementing QuickPay, be sure to keep the following tips in mind. First, don’t offer QuickPay to first-time carriers to avoid fraud. Brokers should also look for a factoring company like Denim that doesn’t charge for QuickPay, giving you the ability to add a new revenue stream by charging a fee.
Making payments consistently and on-time, every time, is critical to growing your brokerage. This gives your carriers a predictable, reliable payment schedule they can depend on, all while building your broker credit.
With inconsistent payments, brokerages will be bombarded with calls from carriers wondering where their payment is, when it will come, and wondering if they should work with you again. This inconsistency also negatively affects your credit score, making it more difficult to find carriers in the future, get lines of credit and loans, and grow your brokerage.
In order to ensure consistent on-time payments, be sure to:
More and more often some carriers are choosing to factor their loads, which means brokers need to pay their carrier’s factoring company instead of the carrier directly.
While carriers are used to being paid quickly, sometimes within 24 hours with QuickPay, it’s possible to shift the payment terms with factoring companies to net-30 terms. Making these payments consistently will help reduce follow-up calls from carrier factoring companies, and will help improve your credit score with agencies like Asonia.
We generally recommend paying carrier factoring companies in 27-28 days on net-30 invoices, to stay off of their follow-up call lists. To do this consistently, it’s best to use set-and-forget payment settings through your payments software. Brokers should also monitor and audit invoices to ensure they’re accurate and submitted promptly to avoid any delays in payment.
Implementing all of these systems and rules into your brokerage might seem like a lot of work - and it is when done manually for every invoice and carrier. That’s why we recommend brokers work with a factoring company to automate most (if not all) of these processes.
Freight factoring provides immediate cash flow to your brokerage, giving you the ability to pay carriers right away through programs like QuickPay. Factors like Denim even include a free QuickPay option for brokers, letting you add new revenue streams that often make up for factoring fees immediately. This cash flow also helps cover operating expenses, which would normally need to be delayed until shippers pay their invoices in 30-60 days.
In addition to automating much of your back-office and covering immediate cash flow needs, freight factoring can also help improve your credit by automating payments to carrier factoring companies, and ensuring that payments are made on time consistently.
Here’s our top tips for considering a factoring company:
By adopting these best practices, your brokerage can significantly improve its cash flow, strengthen carrier relationships, and improve the stability of your business. These strategies not only help you avoid late and missed payments but also position your brokerage for long-term success in the industry.
Your payment practices are a direct reflection of your business's reliability and professionalism. By implementing these best practices, you're not just improving your operations – you're investing in your reputation and future success.
If you’re ready to instantly streamline your freight payments and take your brokerage to the next level, get in touch with the Denim team to find out how our factoring services can be tailored to your brokerage's unique needs. With the right partner and practices in place, managing your payments can be transformed from an arduous task into something that moves your business forward, drives new revenue, and helps your brokerage grow.
You've likely built your business on making smart decisions, managing cash flow, and navigating relationships with shippers and carriers. Yet, when it comes to freight invoice factoring, we often hear a resounding, “I don’t need it.” After all, you’ve got things under control, right?
The truth is, many freight brokers who believe they don’t need factoring may be missing out on valuable opportunities for growth and operational efficiency. Factoring isn’t just a solution for struggling businesses. It’s a tool that can supercharge your brokerage's performance, giving you the flexibility, security, and administrative support you need to thrive in a competitive market.
Let's break down the common objections to factoring for freight brokerages and show you how, in reality, it can be a game-changer for your business.
We get it. If you’re self-financed, you’ve likely worked hard to get there. You’ve saved, reinvested profits, and maybe even avoided taking on debt to keep control of your business’s financial health. The assumption here is that since you’ve got cash reserves, you don’t need freight invoice factoring. It’s a reasonable conclusion, but it’s not the full picture.
Opportunity Readiness: Even the most financially stable brokerages need quick access to capital when opportunity knocks. Factoring ensures you have the funds to take on bigger contracts, expand your fleet, or make critical investments without waiting on your shippers to pay.
Administrative Relief: Factoring isn’t just about cash flow—it’s about time. By working with a factor that provides back-office support, like Denim, you can streamline your invoicing and collections processes. This allows you to focus on growing your business instead of chasing down payments. We helped Peregrine invoice in under a minute with our back office support.
Competitive Edge: Cash on hand means you can negotiate better deals with suppliers, offer better terms to clients, and act quickly on market shifts. Factoring keeps your liquidity strong, giving you the edge over competitors who might be slower to act.
Operational Efficiency: By converting receivables into immediate cash, you maintain a consistent flow of working capital. Healthy cash flow allows you to manage day-to-day operations more effectively, without draining your reserves.
A freight broker might think they don't need factoring if they have a line of credit because they believe this credit line provides sufficient liquidity to manage their financial needs. They may view the line of credit as a flexible and readily available financial resource, but when it comes to factoring vs a line of credit, factoring may offer a number of benefits that a line of credit doesn’t.
No Additional Debt: Freight invoice factoring is not a loan. It doesn’t add to your debt load or impact your credit. Instead, it accelerates your cash flow based on work you’ve already completed, keeping your financial profile clean.
Higher Funding Limits: Factoring scales with your sales, not a pre-set credit limit. As your business grows, factoring provides more funds to fuel that growth without the constraints of a credit line.
Credit Services: Factoring includes customer credit checks and vetting, which can help you avoid the risk of non-payment and improve your overall financial management, something a line of credit typically does not offer.
Payments and Collections Automation: Factoring services automate much of your back-office work, from carrier payments to collections. This frees up your time and reduces the administrative burden on your team, allowing them to focus on more strategic tasks.
Factoring sometimes carries the misconception that it signals financial distress. Brokers worry that using a factor will make them look unreliable or unable to manage their own cash flow. However, it is often the opposite. Working with a factoring company signals efficiency to a shipper.
Improved Relationships: Factoring provides immediate funds, ensuring you can pay your carriers and meet other obligations promptly, which can actually boost your reputation with carriers. This freight brokerage used Denim’s factoring to “cement” their carrier relationships!
Simplified Processes: Factoring can simplify your interactions with shippers by streamlining the back office operations and payment process. With factoring handling the heavy lifting on invoicing and collections, you can ensure smooth and efficient operations that bolster, rather than hinder, your relationships.
Growth and Stability: Factoring helps you avoid common cash flow pitfalls and supports sustainable growth. By avoiding payment delays and financial hiccups, you project a stronger, more reliable image to your clients and partners.
Enhanced Service Focus: By outsourcing the accounts receivable process, you free up time and resources to dedicate to customer service and operational excellence. This can lead to better relationships with your shippers and carriers, as they will benefit from your increased attention.
If your shippers already pay their invoices quickly, you might think factoring is unnecessary. After all, you’re not dealing with long payment cycles or cash flow crunches. But even fast payments don’t account for unexpected expenses or new growth opportunities.
Credit Risk Management: Factoring is more than just paying invoices. It includes credit checks and vetting of your shippers, reducing the risk of non-payment and providing peace of mind regarding your receivables.
Access to Immediate Capital: Even with fast-paying shippers, factoring provides immediate cash flow, which can be crucial for handling unexpected expenses, taking advantage of timely opportunities, or investing in business growth without waiting for the end of a payment cycle.
Growth and Investment: Having that extra liquidity, even temporarily, can be the difference between maintaining the status quo and investing in growth. Factoring allows you to reinvest in your business without waiting for customer payments to arrive.
It’s understandable that the idea of paying fees for factoring might seem like a hit to your bottom line, especially in a business where margins are already tight. But factoring fees should be seen as an investment in the overall efficiency and growth of your business.
More Than Just Factoring: With a factoring partner that’s invested in your success like Denim, you get much more than just factoring. Denim offers features like automated invoicing, collections management, free credit checks, TMS and QuickBooks integrations, and document collection. These tools not only save you time but also enhance your profitability by making your operations more efficient.
Reduce The Risk of Non-Payments: Factoring includes thorough credit checks, meaning you’re less likely to suffer from non-payment or bad debts. This protection can prevent costly losses and, in many cases, offset the factoring fees entirely.
A Positive Cost-Benefit Analysis: The immediate access to capital that factoring provides allows you to take on bigger contracts, expand your fleet, or improve services—all of which can lead to higher revenues. Often, the growth enabled by factoring outweighs the cost, making it a smart investment for long-term profitability.
Freight invoice factoring may not be what you initially think, but it offers countless advantages to help your brokerage grow and operate more efficiently. Whether it’s freeing up capital for new opportunities, relieving administrative burdens, or strengthening your relationships with shippers and carriers, factoring isn’t just a financial tool—it’s a strategic advantage.
If you’re ready to see how factoring can transform your business, schedule a demo today.
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Most brokerages wish their team could stay entirely focused on finding new customers, loads, and other business growth activities - not getting bogged down in back-office tasks. A recent industry survey found that 78% of brokers think their back-office operations take too much time, and 52% say they spend over 480 hours a year on just the back-office.
Yet when brokerages don’t have the right tools and systems in place to scale their back-office operations alongside their sales, the whole operation crawls to a halt. This leads to expert team members shifting focus away from moving the business forward to tedious tasks like invoicing, payments, and accounting.
With Denim’s suite of back-office payment tools, brokerages like yours have cut their invoice processing time down to minutes instead of hours, reduced staff time spent on accounting, automated previously tedious back-office tasks, and more.
Below we walk through four different case studies that demonstrate exactly how Denim’s back-office can drastically improve your brokerage’s freight bill processing, invoicing, and factoring processes.
Founded in 2019, Dale Prax has grown Direct Expedite to 26 employees across multiple offices, with nearly half their staff being focused on back-office operations.
Direct Expedite’s Challenges:
Direct Expedite was struggling with invoice processing time, with their old process taking a staggering 2.5 hours to process every invoice.
This inefficiency made it almost impossible to find and retain capable accounting staff, who dreaded the manual mundane data entry that the roles required. Direct Expedite knew there had to be a better way than manual invoice processing, and were seeking a factoring partner who adapted with modern technology and automation.
Denim’s Solution:
Direct Expedite was looking for a way to leverage their existing talent into other roles, but with so many staff stuck in accounting tasks, it was nearly impossible.
They decided to swap their factoring company to Denim, in the hope that our back-office solutions would help speed up their invoicing process. The switch vastly exceeded their expectations, bringing freight bill invoicing processing speeds down from 2.5 hours to just 12 minutes per load!
This one change had a cascading effect on the company, resulting in fewer calls, emails, and manual data entry for the team. As a result, employees were much happier, stayed with Direct Expedite longer, and vastly improved the hiring process.
Roadly Logistics is a growing brokerage that started out specializing in the meal kit delivery industry, and has quickly expanded to other services.
Roadly’s Challenges:
When Roadly began expanding, they quickly realized that long time frames for shipper payments and a busy accounting team meant they needed two solutions: freight invoice factoring services and invoicing automation.
They quickly realized that most old-school factoring companies were still using manual processes and emails to send invoices, leading to long email chains and slow communication for their accounting team. His team was spending far too much time chasing down payments and emailing back and forth instead of focusing on business-critical tasks.
Many of these manual processes also didn’t integrate with Roadly’s accounting software, QuickBooks. They were looking for a solution that checked all of these boxes.
Denim’s Solution:
Through Denim’s factoring services, Roadly’s accounting team was able to finally focus on moving the business forward instead of following up with customers constantly. Plus their cash flow improved, giving Roadly payments up front for invoices that would normally be delayed by 30-60 days.
Most importantly, Denim’s QuickBooks integration helped cut out all of the manual processes involved in invoicing and payments, cutting Roadly’s manual accounting time in half!
Yeti Logistics was experiencing the crunch of a slow economy, and had been forced to operate on tighter margins in recent years. Despite these economic challenges, they were determined to grow and scale their company.
Yeti’s Challenges:
In order to grow, Yeti knew they needed to cut down on the time their team spent on back-office tasks. They were struggling with their existing solution because it lacked integrations with their TMS, causing the team to constantly switch between platforms.
This wasted a huge amount of precious time for staff that were already spread thin, causing frustration across the board. This lack of integration and automation left Yeti’s team spending 3-4 hours every day just to manually enter shipment data into multiple systems, spreadsheets, and platforms.
Denim’s Solution:
Denim’s built-in integration with TMSs like the one Yeti Logistic uses, EKA, completely automated tasks that were previously manual. Instead of downloading documents, transcribing them into a spreadsheet, and then uploading that sheet into their old freight bill factoring platform, everything was done automatically at the click of a button.
Jobs were transferred seamlessly from EKA to Denim for factoring and payment, automatically. This cut down on the need for manual and repetitive data entry, audited invoices for errors, and cut down on human errors that often sneak into manual processes.
All of this automation saved Yeti 75% of the time they used to spend on back-office tasks, freeing up team members to focus on driving the business forward all while cutting down on errors and keeping customers and carriers happier than ever.
Peregrine is a lean and quickly growing brokerage focused on providing reliable services to shippers while maintaining strong, healthy, and respectful relationships with their carriers.
Peregrine’s Challenges:
Before working with an advanced factoring company and payment platform like Denim’s, Peregrine was using manual processes to make payments to carriers and invoice customers.
They were stuck manually downloading documents from their Transportation Management System (TMS), creating and sending freight invoices to customers via email, and managing direct payments to carriers. This manual method was extremely inefficient and error-prone, causing concerns from customers and carriers, slowing down their cash flow, and leading to frustration across the board.
They knew that to achieve their growth goals, automating some of this process would be required.
Denim’s Solution:
Peregrine found Denim when they were looking for a technology-focused freight factoring service that could adapt to their needs. They used Denim’s back-office suite and integrations to cut down on freight bill invoicing time, improving their speeds to under a minute per invoice.
This alone nearly tripled their team’s efficiency, giving them the opportunity to grow their business without adding any additional back-office staff. Plus through Denim’s use of Zapier integrations with Shipwell, jobs were seamlessly transferred between Denim and Peregrine’s TMS, further cutting down on manual data entry and error-prone tasks.
This massive leap in efficiency led Peregrine to grow to $12-15 million per month, earn an A rating on Truckstop with zero complaints from customers or carriers, and stay lean all at the same time.
The back-office of your brokerage is more than just mundane accounting tasks - it’s responsible for moving many parts of your business forward, and can be a huge bottleneck if not enabled by the right tools and systems.
Without proper integrations between your TMS, factoring company, and accounting software like the examples above, your back-office staff will be stuck in mundane and error-prone data-entry tasks that take forever and only cause problems. Automating these processes leads to happier customers, staff, and carriers, a more efficient business, and gives your brokerage the leverage it needs to grow.
Want to learn more about how you can be Denim’s next success story? Click here to speak with our team and get started today.
Factoring and saving money might not seem like they go hand in hand at first glance.
Many in the trucking industry view factoring companies as just another middleman taking a cut of their hard-earned margins. However, at Denim, we believe that factoring can be a powerful financial tool when tailored to your unique business needs.
We understand that every freight broker and fleet has distinct financial requirements. To address these needs, we’ve developed flexible factoring rates that provide unparalleled control over your costs. Our approach ensures that you can maintain healthy cash flow without compromising your bottom line.
Let’s explore what factoring rates are, how they're determined, and how Denim's innovative factoring for freight brokerages and fleets can benefit your business.
Factoring rates are fees charged by factoring companies to advance money against your invoices. This financial service helps businesses maintain cash flow without waiting for customer payments. The factoring rate typically represents a percentage of the invoice value and varies depending on several factors.
Factoring rates are influenced by:
Traditional factoring rates can be rigid, often not reflecting the nuances of your business needs. That's where Denim's flexible factoring rates come in.
Traditional factoring rates offer a one-size-fits-all approach. Denim, however, provides flexibility, allowing you to tailor your factoring rates to your business model. Here are 4 ways we do that:
Selective factoring allows you to factor only the invoices you choose, giving you the power to manage costs effectively. This approach is perfect for businesses that don't need to factor every invoice and want to optimize their cash flow strategically.
Yeti Logistics saved $20,000 annually on factoring fees by factoring only what he needed. Learn how this helped Yeti’s strategic growth.
Flex Factoring offers even more control by providing prorated discounts for delaying advances (both your own advances and advances to contractors).
Denim doesn’t charge brokers a fee for QuickPay. Because of this, brokers can choose to charge a fee to their carriers, creating an additional income stream.
River City Logistics leveraged Denim’s quickpay options to maintain their carrier relationships when they transitioned from an agency to an independent brokerage. Learn more about how QuickPay shaped their brokerage.
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Every brokerage is different and our sales team will be happy to walk you through exactly how much money you could save when you factor with Denim.
Here are a few examples of what our flexible factoring might look like:
You're working with a carrier or fleet that factors their invoices, so you don't need to QuickPay. By delaying your carrier payment for 20 days, you receive a discounted rate based on the value of the invoice, ultimately lowering your costs. This approach helps you maintain cash flow while benefiting from reduced factoring fees, ultimately improving your bottom line.
You've taken a last-minute load from an existing customer to strengthen your relationship, but the margin is tight. To reduce costs, you delay your advance for up to 30 days, cutting your rate in half and improving your margin on the load. This strategic delay in advances not only saves you money but also enhances your profit margins, making last-minute loads more financially viable.
Denim's flexible factoring rates are designed to provide you with maximum control and savings. With Denim, you can tailor your factoring strategy to meet your unique business needs and enhance your profitability. For more information and to see your potential savings, request a demo of our platform.
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Factoring helps trucking fleets maintain cash flow and manage their finances effectively. However, not all factoring services are created equal. Choosing the right factoring partner can significantly impact your fleet’s financial health and operational efficiency.
Traditional factoring companies often come with rigid terms and limited flexibility, which can stifle growth and create additional financial burdens. On the other hand, innovative factoring solutions like those offered by Denim provide a more adaptive and supportive approach.
Let’s look at some of the main benefits you can enjoy when you switch factors and work with a fleet factoring company that supports your business.
Traditional trucking factoring companies often operate with set rates for every load, which can be limiting for fleets. These companies typically offer one fixed rate based on your loads, regardless of payment terms, which can hinder growth and scalability.
In addition to fixed rates, traditional factoring companies often require you to factor all of your loads with them, which you may not want to do (especially when you have clients who pay quickly.) They also don’t offer discounts for early payments.
Traditional factoring:
Denim offers the most flexible approach to factoring for fleets.
With Denim, you can choose which loads you want to factor—whether all or only some—allowing you to only pay for the money you need.
Our Days Sales Outstanding (DSO) pricing means that our clients' factoring fees are adjusted based on how quickly their shippers pay. If your shipper pays faster than Net 30, you get a discount. Conversely, if they pay slower, your rate is adjusted to a new daily rate based on the days outstanding.
Don’t need your advance right away? Denim’s flex factoring allows you to push out your advance (up to 30 days) for a discounted rate, providing even more financial flexibility (check out our flex factoring calculator to see how much you could save).
Both of these programs can be combined for optimum discounts on your rate. With Denim, you are in control of your rate.
Non-recourse factoring is often touted by traditional trucking factoring companies as a protection from non-payment. However, this can result in higher rates and increased risks.
For example, if a shipper claims non-payment due to damage, you may end up disputing this, but if it’s your fault, all your loads from this shipper are considered full recourse, but at a non-recourse rate (which is often high).
Non-recourse factoring also limits who you can work with, as most traditional companies underwrite shippers but not brokers due to perceived higher risks. This is why many fleets choose a suitable non-recourse factoring alternative.
Denim is purpose-built for recourse factoring to save clients as much money as possible.
Most traditional factoring companies primarily communicate over email and charge fees for various services such as wires, quickpay, and minimums. They also have high early cancellation fees, locking you into long contracts with penalties as high as 50% of your contract value.
At Denim, we prioritize transparent and communicative customer support.
Our customer support team is available through phone, email, and chat and will respond within a few hours.
Traditional trucking factoring companies typically only offer factoring and capital for your business, often charging extra for efficiency tools. This can lead to additional time, money, and overhead because you’re required to download and re-upload documents between systems.
Denim provides a comprehensive back-office platform included with your factoring rate.
Our tools, such as document audit, document inbox, and analytics dashboard, help you manage collections and invoicing efficiently, reducing the need for additional hires. And, with two-way integrations, you can send documents and loads from your Transportation Management System (TMS) to Denim for funding and see job statuses back in your TMS. This seamless integration saves time and enhances productivity.
With traditional factoring companies for trucking, you’re often just one of thousands of clients and have no customization options available to fit your unique business needs. These traditional factoring companies prioritize protecting their business, sometimes at the expense of providing personalized service.
Denim works closely with each client to ensure complete satisfaction. Our team of experts is always available to answer questions and set up systems tailored to your business. Each client is assigned a dedicated customer support team member to assist with their needs, ensuring a high level of personalized service.
Switching to Denim for your factoring needs offers many benefits over traditional factoring companies. From flexible rates and top-tier technology to transparent pricing and superior customer support, Denim is designed to help fleets operate more efficiently and grow their businesses.
If you're interested in switching your factoring company and want to work with a partner that truly understands and meets your needs, request a demo today.
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