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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Scaling your brokerage is not a straight line. You can’t expect one single market to take your brokerage from SMB to Top 100.
Niching down is always advised, but there comes a time for every brokerage to expand. Whether it's a market similar to the one you currently serve or a completely different area of expertise, understanding the size of the opportunity is crucial. That's where market sizing comes in.
Today, more than ever, understanding your potential market size helps in making informed decisions, reducing risks, and maximizing growth opportunities.
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Credit is more than just a number in the freight industry. It’s a critical signal that carriers and lenders use to identify the best brokers from the shady ones - which can lead to some challenges for newly established brokerages who haven’t had a chance to build credit.
This can be especially true for those who are establishing a brokerage after leaving an agency or adding a brokerage arm to an existing fleet. You’ve been in business for a while, but without an established brokerage you may not have a freight broker credit score attached to your business.
This can make the job of finding and establishing a relationship with new carriers incredibly challenging, not to mention securing financing and building your reputation as a broker.
Credit can impact almost every aspect of a brokerage. Brokers with good credit scores have an easier time getting financing, finding carriers who want to transport their loads, and getting the best rates from lenders.
This can feel like a chicken-and-egg problem when trying to establish something new. You need credit to establish trust with carriers and lenders, but need loans and payment history to establish credit. What is a newly formed brokerage to do?
In this article, we’ll cover the importance of freight broker credit, how to establish a solid credit score and reputation (even if your brokerage arm is brand-new), what factors impact your credit score, and more.
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Freight brokers are mostly known for what goes on on the front end, like securing new loads, finding new customers and carriers, and making sure everything runs on time and is delivered safely. The face of every brokerage starts with leadership, sales, and business development staff. These are critical functions of every brokerage, but behind the scenes there’s an equally important side of the business: the freight brokerage back-office.
A brokerage’s back-office is essentially everything that goes on behind the scenes. It’s the backbone of your business, and takes over when loads are delivered and ends with you (and your staff) getting paid. This critical function of every brokerage is often left as an afterthought for many owners, who focus much more of their time on finding new customers and loads, hiring agents, and more. While those functions are critical to the growth and success of every brokerage, without a streamlined back-office operation, brokers may find themselves at a plateau, despite having plenty of business coming in.
For example - imagine your brokerage recently transitioned your book of business from an agency to an independent operation, like Alliance Logistix did in 2023. They transitioned from the invoice-free workflow of an agent-model brokerage to an independent brokerage, and were almost immediately overwhelmed with new paperwork, new payment processing procedures, and more.
Or picture this: your sales team just won a big bid for a shipper, but your back office isn't equipped to handle the jump from 100 to 1,000 new invoices a month.
These scenarios are common in the industry, because most brokers underestimate the amount of time and resources the back-office demands. In fact, a recent industry survey found that 78% of brokers think their back-office operations take too much time, and 52% say that they spend over 480 hours a year on just the back-office.
These bottlenecks can lead to stagnating growth, even when sales are better than ever. If your back-office can’t process the volume your team is selling, it’s almost impossible to grow. Back-office slowdowns can lead to delays in invoice processing, unhappy carriers, and ultimately lost business.
On the other hand, brokers with a streamlined back-office can cut their invoice processing time down by 60% or more, improve cash flow, and quickly adapt to improve volume without adding any additional staff.
In this guide to the most important back-office processes for freight brokers, we break down everything you need to know to optimize, simplify, and streamline your operation. You’ll get an in-depth look into everything involved in the back-office, what resources are needed (and which you can skip), how to leverage technology, and actionable tips to improve your back-office almost overnight.
First, let’s dive into what exactly constitutes a freight broker back-office and why it's so crucial to your business.
The first roles most brokers think of when discussing critical staff are their sales and business development teams. These are the most visible roles at every brokerage, and we agree - they’re super important members of every team!
While these front-line positions are crucial, they’re also just the first step in the lifecycle of a load. Behind the scenes, the back-office handles everything after a load is delivered, from accounting and billing to document management, reporting, relationship management, and more.
Here’s everything the back-office encompasses:
Accounting and Billing is all about invoice generation, payment processing, collections, and managing financial records. It's the financial backbone of your brokerage, ensuring that money flows in and out correctly. This includes:
Document management is where the back-office handles important paperwork such as Bills of Lading (BOLs), Proof of Delivery (PODs), and carrier contracts. This process ensures that all necessary documentation is collected, verified, and stored properly. It includes:
Vendor management is all about overseeing relationships with various service providers and technology partners. This includes:
Your back-office is also responsible for generating financial reports, analyzing business performance, and preparing documentation for taxes. This helps provide brokers insights that drive decision-making and strategy. It includes:
Maintaining communication with carriers and shippers, resolving disputes, and nurturing long-term partnerships. This function ensures smooth operations and customer satisfaction. It includes:
As you can tell, the back-office of your brokerage is about a whole lot more than just managing invoices and processing payments. It’s the heartbeat of your entire organization, and not only dictates the efficiency of your operation, but can also be a key factor that limits a broker’s growth.
Here are just a few ways back-office operations are critical to the success of every brokerage:
Back-office operations directly influence your brokerage’s ability to scale and operate efficiently. A well-organized back-office can handle increased volumes without an increase in staff, allowing for sustainable growth.
Case Study: Alliance Logistix
Alliance Logistix had a high volume of loads that quickly overwhelmed their small team. Their team was getting bogged down in paperwork and data entry, causing delays in carrier payments, and overwhelmed staff.
By streamlining their back-office processes, Alliance Logistix cut their invoice processing time by 62%, which freed up accounting staff to be reassigned to dispatch. This change alone helped them grow shipping volume by 35% month over month. New processes and a partnership with Denim helped Alliance Logistix retain one of their biggest clients who had changed their payment terms. The time savings from streamlining their back-office operations and implementing new tools allowed Alliance Logistix to finally focus again on revenue-generating activities, showing that simple back-office optimization can directly lead to business growth.
Cash flow is the lifeblood of every brokerage, and your back-office is an essential piece of this puzzle. Efficient back-office operations ensure that invoices are sent on time, are accurate, and get paid. Coupled with partnerships with a freight factoring company, the back-office helps ensure your brokerage has the working capital needed to pay carriers promptly and fund your operation.
Keeping customers and carriers happy involves a lot more than just delivering loads on time. Without a streamlined back-office, your brokerage might struggle to invoice carriers accurately, make payments on time, keep track of important documents, and more. The back office is critical in keeping customers happy, ensuring every experience with your brokerage is a good one. Finishing a load with accurate and prompt billing, collections, and payments makes it easier for customers and carriers to use your brokerage again in the future.
On top of managing the accounting and relationships of your business, the back-office also often has crucial business data that can inform decision-making. Back-office tools and processes for reporting and analytics give leadership the information they need to make data-driven decisions about everything from pricing to operational improvements.
A freight broker’s back-office plays a vital role in risk management and compliance. From ensuring compliance with industry regulations and standards to maintaining accurate financial records, the back-office helps safeguard against operational and financial risks. It also plays an important role in ensuring regulatory compliance and record-keeping. Proper documentation, record-keeping, and reporting processes are essential for meeting industry standards and regulatory requirements such as those set by the DOT and FMCSA.
If you’ve ever tried to assign an agent to an accounting task, you know how important the back-office can be in keeping staff happy. Efficient back-office processes can significantly improve employee satisfaction by keeping them out of the weeds of manual, repetitive tasks like data entry, keeping them happy and engaged in more business-critical tasks.
There are a few processes that brokers should master for a successful back-office: Accounting and billing processes, document management processes, relationship management, and reporting and analytics. These processes are essential tasks for every freight broker’s back-office, and below we’ve outlined a breakdown of how to optimize and systemize each.
Accounting and billing should be one of the first priorities for freight brokers, and breaks down into three categories: Timely collections, payment processing, and managing disputes.
Timely invoicing and collections means ensuring all bills are sent quickly and paid on time. This is an essential step to maintain healthy cash flow in your business. Here's a step-by-step guide to optimize your collections process:
Establish clear payment terms:
Simplify and automate invoicing:
Create a standardized follow-up process:
Create a system to monitor and analyze payment trends:
Establishing and streamlining your payment processing helps minimize errors like misdirected payments, prevents credit score drops due to late or missed payments, and helps avoid delays. Here's how to optimize this process:
Handling disputes professionally is crucial for maintaining good relationships with both carriers and customers. Many disputes can even be prevented before they begin by clearly explaining fee structures, accessorials, and more.
Here's a systematic approach to dispute resolution:
Once your accounting and billing processes are in order, it’s important to set up a document management system and processes. This ensures all your documents are stored safely and securely, are accurate, and can be found quickly when they’re needed.
Maintaining accurate records is essential for regulatory compliance and smooth operations. This includes accurate data entry, gathering and storing payment information, and storing relevant documents. Here's how to optimize this process:
Efficiently collecting and auditing Proofs of Delivery (PODs), Bills of Lading (BOLs), and vendor contracts is crucial. Here's how to optimize this process:
Managing relationships is a softer skill, but is equally important in growing your brokerage and streamlining your operation. There are generally three core relationships that your back-office will deal with regularly: carriers, customers, and vendors.
Building strong carrier relationships is key to growing any brokerage. Brokers should implement systems and processes for fielding calls, payment inquiries, and resolving disputes. Here's how to optimize this process:
Establishing and maintaining strong customer relationships extends beyond just the sales team. It also involves communicating with customers about invoices and payments, load statuses, resolving disputes, and building long-term relationships. Here's how to optimize this process:
Choosing the right vendors can often mean the difference between a simple and efficient back-office and a convoluted one. This makes effective management of external vendors another important aspect of back-office relationship management. Here's how to optimize this process:
Lastly, a streamlined back-office puts all these things together with consistent reporting and analytics. Consistently tracking important metrics and KPI’s is an essential part of every freight broker’s back-office operations, and helps monitor the health of the business, identify areas for improvement, and provide important tax documentation.
Accurate and timely financial reporting is crucial for informed decision-making. Here's how to optimize this process:
Creating a tax documentation system is essential for compliance and maintaining the financial health of your brokerage. Here's how to optimize this process:
That’s it! By mastering these back-office processes, you'll create a solid foundation for your freight brokerage to streamline your operation.
However, managing all these tasks manually can seem overwhelming and overly time-consuming. That’s why next we'll cover how technology and third-party services and freight software can support and streamline your back-office operations, allowing you to focus on growing your brokerage.
While these processes and systems outlined above may seem daunting, don’t fret! There’s a lot of technology and services that can be used to help manage these systems with a lean staff. Using appropriate technology helps reduce the time spent on back-office tasks, so you can spend more time focusing on growing and expanding your brokerage.
These pieces of technology and back-office software also help keep overhead costs down, and scale alongside your brokerage, freeing up resources to expand.
Processes supported: Collections, invoice generation, carrier payments, cash flow management, and financial reporting.
Factoring is an essential tool for most freight brokerages. Factoring helps brokers looking to streamline their back-office collections process, invoice generation, carrier payments, and more. Factoring involves selling your unpaid invoices to a factoring company to access the vast majority of the invoice upfront, so you don’t have to wait 30-90 days for your customer to pay. This instantly improves cash flow and reduces the burden of collections and payment processing.
Case Study: River City Logistics
River City Logistics started out small like many small brokers, transitioning from an agency model to an independent brokerage. Like most small teams, they wanted to scale sustainably without growing their headcount too quickly. They needed a solution to equip their billing lead with the tools to operate as a one-person team.
By implementing factoring, River City Logistics avoided hiring 1-2 new staff to support back-office operations.
Automation enabled one person to handle the increased workload efficiently, all while keeping carriers happy and paid quickly with QuickPay.
Read more about how factoring can streamline operations here.
Processes supported: Expense tracking, tax season preparedness, and payroll.
Implementing an accounting system is crucial for maintaining accurate financial records and simplifying tax preparation. While there are lots of different accounting software for freight brokers out there, it’s important to choose an established vendor for such an important task, making QuickBooks a popular choice. Denim's factoring services integrate seamlessly with QuickBooks, further streamlining your financial processes.
Processes supported: Payments, collections, and document management.
New tools and innovations have recently made document auditing significantly faster and easier for brokers. By leveraging AI-powered audit tools, brokers can significantly reduce the time spent manually reviewing documents for accuracy. These tools can scan invoices, BOLs, and other crucial documents, flagging discrepancies and potential issues for review.
A recent report by ControlPay found that only 17% of invoices are accurate - leading to costly mistakes, unhappy customers, and countless hours wasted. Using an AI freight document auditing tool can quickly and easily spot mistakes early, automate invoice matching, and streamline the document auditing process for your back-office.
Processes supported: Document management, carrier communication.
An automated document collection inbox is a resource where carriers can send BOLs, PODs, and invoices, simplifying document collection and processing. This streamlined workflow eliminates the need for long email chains and follow-up calls to find the right documentation, and eliminates redundant data entry.
Denim offers a free document collection tool for all factoring clients, allowing easy attachment of required documents to a job with a single click. This eliminates the need to download and upload documents between platforms, saving time and reducing errors.
Processes supported: Carrier relationships, document management.
Efficient carrier onboarding is crucial for maintaining compliance and starting relationships out on the right foot. Tools like MyCarrierPortal can streamline the process of collecting payment information, signing and sending contracts, collecting insurance information, and more.
By implementing these different pieces of freight broker software and systems, brokers can significantly improve their back-office efficiency. This gives your team more time and freedom to focus on growth, instead of being bogged down in paperwork and accounting tasks.
If you want to grow your brokerage, a streamlined back-office is essential. It’s the backbone of your business, and provides the front-of-house agents and brokers the resources they need to close more deals.
Throughout this guide we've outlined the most important components for efficient and effective back-office for freight brokerages. Let's recap the essential points:
Here are some of the most important next steps to start improving your back-office operations today:
By focusing on streamlining your back-office operations, you're setting your freight brokerage up for sustainable growth. An efficient back-office is about more than just reducing costs - it enables your team to focus on what really matters: building relationships, moving freight, and growing your business.
If you’re ready to learn more about how to improve your business and grow with an efficient back-office, take a look at our guide to freight broker software here, or speak with a member of our team here to find out how Denim’s back-office solutions can help your brokerage scale.
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If you’re a broker that works with carriers that factor, you know how annoying the constant calls regarding payment from their factoring companies are. These calls can be a significant drain on your time and efficiency and not only disrupt your workflow, but can also lead to unnecessary stress and frustration.
But wait, isn’t Denim a factoring company, as well? Yes, but we specialize in factoring for freight brokers and fleets. Carrier factoring companies provide liquidity to owner operators and smaller carriers to help them manage cash flow, pay for fuel, maintenance, and other operational costs. They advance a payment to a carrier and then contact you for that payment.
If you’re tired of the calls from carrier factoring companies that are trying to chase down payments, here are 3 steps to minimize these calls and improve your day-to-day operations.
The first step to reducing calls from carrier factoring companies is understanding your average days to pay for their invoices. This freight brokerage metric is crucial as it determines when factoring companies expect payments and influences their follow-up frequency.
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To calculate your average days to pay:
By knowing your average days to pay for a carrier, you can better anticipate when factoring companies might start reaching out. This awareness is the foundation for the next steps in reducing those calls.
Factoring companies track your average days to pay, and use the metric as a benchmark. If you pay beyond the average, they will likely start contacting you, regardless of your contractual payment terms.
For instance, if you usually quickpay (1-2 days), factoring companies will expect this prompt payment consistently. Any delay, even if minor and within your agreed terms, can trigger persistent follow-ups.
Here's why this happens:
In order to effectively manage this, it is important to make regular payments. One convenient way to achieve this is by partnering with a freight factoring company like Denim, which offers a days-to-pay feature. This feature automatically sends payments a specified number of days after the date of the invoice. By maintaining this consistency, the need for follow-up communications will be greatly reduced.
As carrier factoring companies typically have a large workforce, it is impractical to engage with their collections team. The best approach is to avoid getting on their list altogether, which can be accomplished by consistently making freight payments on time.
One strategic way to reduce calls is by shifting your payment terms to Net-30 days, if possible. This approach offers several benefits:
Flexibility
You have more time to manage cash flow and handle unexpected delays without immediate pressure from factoring companies.
Reduced Follow-ups
Factoring companies typically check outstanding payments on a monthly basis. With consistent net-30 terms, you are less likely to appear on their follow-up list. We recommend paying in 27-28 days to stay below net-30 business days.
A Better Score
Net-30 payment terms are often favorable in credit reporting with agencies like Ansonia, which can enhance your reputation and reduce hassle.
As you build up your average days to pay to 30 days, you will likely still receive calls. Remember, creating a new average takes making Net-30 payments consistently for multiple payments. It won’t happen overnight, but eventually you will notice less calls from carrier factors.
Delaying your payment to carrier factoring companies might seem like the opposite of what you want to do if you want to build credit, but in reality, delaying payment may actually improve your broker credit score.
This is because some of the largest carrier factors don’t report payments to business credit bureaus like Ansonia if they are paid faster than 30 days. Some will only report open balances once a month. So if you are consistently paying down the balance as soon as it’s open, your volume will not be reported. A Net-30 day score is considered perfect with Ansonia.
Carrier relationships your business. One of the main benefits of using a platform like Denim is to strengthen carrier relationships through transparency and quick payments.
In the steps outlined above, you are paying the carrier factor, not the carrier directly. Because of this, delaying payment and not quickpaying won’t have any impact on your carrier relationships because your carriers are still getting paid on time.
By finding your average days to pay, understanding the expectations of factoring companies, and shifting to Net-30 payment terms when feasible, you can significantly decrease these interruptions and enhance your operational efficiency.
In addition, working with a freight broker tool like Denim can help alleviate some operational stress. Not only is our platform designed to help you build strong carrier relationships, but we often have relationships with carrier factoring companies so we can provide guidance on ideal average days to pay.
We help brokers optimize their back office operations, including paying carriers, to grow their brokerage. If you’d like to learn more, request a quote today.
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Everyone knows that margins are tight, timing is everything, and cash flow is king. To keep up with competition (and keep themselves afloat), more and more carriers are choosing to factor to get paid on time.
As a broker, building credit with these carrier factoring companies can be a challenge, especially if you have a new MC number and little to no credit history. It’s kind of like the chicken and the egg predicament: carrier factors require consistent payment history, but brokers can get this payment history if they don’t have carriers to work with.
All that being said, it is possible to build credit and trust with carrier factoring companies. Here, we share 3 tips to help.
Maintaining a steady cash flow is crucial for fleet companies to maintain operational efficiencies and pay their carriers on time. With the average operational cost of running a truck at almost $2/mile and fuel costing anywhere from $50,000 - $70,000/year per truck, it’s no wonder that factoring services for fleets are becoming more popular.
Fleet factoring offers a viable solution for trucking fleets to manage their finances by converting unpaid invoices into immediate cash. However, choosing the best factoring company requires careful consideration.
Here are some questions you should ask to ensure that you partner with the best fleet factoring company for your needs.
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The trucking industry faces challenges. These include changing capacity. Also, more carriers are exiting. And, there's a surplus of carrier fraud and identity theft.
Carrier and broker relationships are more important than ever. A trusted carrier could be the difference between making a profit on a load or taking a financial hit.
Building strong carrier relationships starts with streamlined onboarding and communication. Completing the due diligence at the beginning will help avoid problems later on.
Here's a detailed look at how you can improve your carrier onboarding process. This will boost efficiency and build stronger relationships.
Carrier onboarding refers to freight brokers' meticulously verifying and approving new carriers.
Onboarding processes ensure that you complete all necessary documentation, checks, and relationship-building. Thoroughly check the carrier's qualifications, insurance, and safety track record. Also, safely record their payment details.
Carrier onboarding can present several challenges. Understanding these pain points can help you develop a more efficient process:
Avoiding Bad Carriers and Double Brokers:
One of the primary challenges in carrier onboarding is ensuring the legitimacy and reliability of carriers. Fraudulent carriers and double brokering can lead to big financial losses. They also damage reputation.
Ensuring a Smooth Onboarding Process:
A cumbersome and inefficient onboarding process can deter great carriers. A condensed, streamlined process builds strong relationships from the start.
Securely Managing Payment Information:
Proper handling of this data can prevent delays and, more importantly, establish trust with your carriers.
Implementing effective strategies can significantly enhance your carrier onboarding process. Here are five key strategies to consider:
1. Integrate Your Carrier Onboarding Platform with Factoring (see why others recommend Denim!)
Integrate your onboarding platform with a factoring service. An onboarding and factoring integration removes the need for brokers to store sensitive information like banking details. The streamlined approach saves time and ensures carriers receive fast and accurate payments. Because at the end of the day, we all want on-time payments.
2. Utilize a Comprehensive Carrier Packet
A carrier packet contains all the necessary information for onboarding carriers. Each packet is different. But, it typically includes permits, insurance, W-9 forms, and safety records. All this information in one place streamlines onboarding. Ensure the packet is easy to access and understand from mobile devices, reducing potential confusion.
3. Implement Rigorous Carrier Monitoring
Continuously monitor carrier performance and compliance to maintain a reliable carrier pool. Tools like MyCarrierPortal provide fraud warnings and real-time updates about any changes in a carrier's status. This proactive approach reduces risks and ensures you work with the best carriers available. Regularly check carrier performance to ensure ongoing reliability.
4. Enhancing Communication and Support
Open communication lines and easy-to-use onboarding tools are crucial. Clear instructions and mobile-friendly tools help carriers navigate the onboarding process smoothly. Providing this level of support builds trust and fosters long-term relationships. Maintain open and transparent communication channels throughout onboarding to ensure carriers feel supported.
5. Leverage Technology for Verification and Compliance
Use advanced technologies like AI and machine learning to verify carrier information more accurately and quickly. Automated systems can cross-check data against various databases, reducing the risk of onboarding fraudulent carriers. AI-powered tools can check insurance details, safety records, and operational authority. They reduce the need for manual checks. Utilize these technologies to streamline verification and compliance checks.
Vetting carriers and maintaining strong carrier relationships are crucial for running a successful brokerage. The foundation of any good carrier relationship starts with effective onboarding.
Carrier onboarding should be simple, fast, and accurate. Utilizing AI tools and integrating onboarding with factoring speeds up the process and eliminates double data entry for your team.
Denim's new integration with MyCarrierPortal aims to streamline onboarding. Carrier details are automatically imported from MCP to Denim. The integration connects carrier onboarding from vetting to fast payment.
To learn more about how Denim can help optimize your carrier payments and streamline your onboarding process, schedule a demo with us today.
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