Most freight brokers don’t realize how much of an impact their back-office can have on their growth. Brokers frequently associate growth with front-end activities like sales, finding new customers and carriers, and other business development tasks. But as your brokerage grows, your business is more likely to run into back-office bottlenecks from delays in invoicing, payments, processing paperwork, and more.
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.
As your business grows, you’re left with two options to solve this problem: invest in hiring the staff required to cover your new volume, or leverage tools and vendors to support your existing team.
Hiring new team members can be costly, risky, and time-consuming - which is why we recommend exploring back-office automation tools before committing to expanding your staff.
Some services provide complete back-office solutions for brokers — including everything from submitting jobs, providing comprehensive dashboards, TMS integrations, carrier portals, automated invoicing and collections, payment processing, and more. Other solutions in the industry might only offer one or two of these features, and are far from comprehensive.
Below we’ll compare how Denim’s flexible factoring and back-office automation tools can offer a complete system for most brokers, and why we think Denim is the best solution for brokers who want to grow without adding more back-office staff.
Submitting new jobs
Submitting jobs is the first step in getting a load factored. Most factoring companies require a BoL (bill of lading), PoD (proof of delivery), and rate confirmations to purchase (factor) your invoices. How this works varies from company to company, here’s how Denim’s solutions stack up:
Denim’s solution:
Submitting a job with Denim is simple and fast - so fast you can do it in under 30 seconds. Jobs can be uploaded through Denim’s online or portal or directly through a TMS integration at your earliest convenience.
When uploaded through Denim’s portal, the intuitive interface makes it easy to find exactly what you need when you need it. Information icons are there to walk you and your team through the process. Presets and commonly used companies remove any redundant data entry, so you can focus on booking more loads.
Key benefits:
- Submit jobs through a self-service portal or TMS integration.
- Denim’s TMS integrations let data flow seamlessly between your TMS and factoring platform with a single click.
- Presets and commonly used companies to eliminate duplicative data entry.
Traditional factoring companies:
Submitting jobs to traditional factoring companies can be a time-consuming and error prone process. There are two main routes taken: CSV upload or email.
The average factoring company has a dashboard to upload CSV files with load details and separate PDF documentation with BoLs, PoDs, and rate confirmations. Batching loads like these can take dozens of hours and lead to errors when a load data is different in the csv than the pdf document.
Alternatively, some factoring companies require you to email this information. This often results in several back-and-forth emails to correct mistakes and verify information.
Some factoring companies have TMS integrations, but they are often delayed updates, meaning updates are only displayed 1-2 times per day.
Client dashboard
One important feature that isn’t always available for factoring clients is a comprehensive client dashboard that gives real-time metrics and data so brokers can make informed decisions on the fly. Here’s how Denim’s client dashboard stacks up against more traditional solutions:
Denim’s Dashboard:
With the Denim dashboard, brokers get a bird's eye view of the most important financial metrics. They can instantly gain insights into stats like jobs over time (with predictive month-over-month analytics), Days Sales Outstanding (DSO), total amount factored, fastest and slowest paying customers, and most profitable customers - all at a glance.
Custom roles and permissions with Denim for Teams lets brokers set custom roles and permissions for the whole team, giving the exact data points every team member needs. This protects sensitive business information and gives more control to owners.
Custom reports can also be requested on demand by team members so they can find important information fast.
Key benefits:
- Find important data at a glance.
- Set custom roles and permissions for specific team members.
- Request custom reports on important data on demand.
Traditional factoring companies:
Traditional factoring companies have limited or non-existent dashboards. Many require brokers to request specific data or metrics through email, leading to slow response times and confusing email chains with potentially unreliable customer support teams.
When traditional factoring companies do provide dashboards, they often do so through “view-only” portals which only offer basic transaction reporting and payment statuses. These dashboards often require employees to share passwords, and offer limited if any control over which team members can view sensitive information.
Client tools
Brokers need more than just working capital to run their business - they need modern tools that improve efficiency and their bottom line. Here’s what Denim and other factoring companies offer:
Denim’s Document Management:
Denim's Audit, Document Collection and Inbox features give brokers an easy way to collect and audit documents automatically, saving countless hours for back-office staff. Both tools are included for all factoring clients, and provide automatic document auditing that helps identify errors before you hit submit. This alone vastly improves the time it takes to submit new jobs.
The Denim Document Collection & Inbox organizes all PoDs, BOLs, and Rate Confirmations in a simple easy-to-use inbox, and automatically attaches the correct documents to every job - finally ending the constant searching through your inbox and PDF merges for document submissions.
Key benefits:
- Auditing tools automatically check documents for errors or missing information and cuts down on manual, time-consuming processes.
- Document collection inboxes automatically organize and securely store important documents so they’re always available when you need them.
Traditional factoring companies:
Traditional factoring companies provide little in the way of client tools, and are primarily focused on providing working capital to brokers. Factors that do provide these tools often do so at an additional cost for brokers.
Carrier portal
Effective carrier communication is critical for brokers, both to keep customers informed and to reduce unnecessary back and forth between your team and carriers. Here’s how Denim helps brokers keep carriers informed while saving staff time:
Denim’s carrier portal:
Denim’s Carrier Portal gives carriers an easy way to stay informed at every step of the process, and is available for all factoring customers. This helps cut down on calls from carriers asking about payments, giving them real-time updates on payment status. Automated emails are sent to carriers when payments are complete, saving your staff time.
Key benefits:
- Carrier portal access is available for all customers.
- Automatic and real-time updates are available for carriers.
- Automated email alerts cut down on calls to your team.
Traditional factoring companies:
Traditional factoring companies provide little or no outbound communication to carriers on behalf of brokers. The broker is responsible for all communication with carriers about payment, leading to excess calls and frustrated staff and carriers.
Some factors will send out update emails when payments are completed, but it’s up to the broker to send any other communication.
Invoicing and collections
Efficient invoicing and collections are vital for maintaining healthy cash flow. Denim’s back-office automation tools give brokers new advantages in these areas too:
Denim’s process:
Denim’s automation tools make it easy for brokers to create and distribute invoices for shippers in minutes, instead of hours. As soon as rate confirmations and PODs are received, your client can be invoiced. No more waiting for carriers to send invoices, letting the aging clock start sooner.
Denim also automatically alerts brokers of aging invoices, and follows up with shippers and brokers to prevent slow payments. Brokers can work directly with Denim to collect on invoices before using more drastic measures like chargebacks.
Key benefits:
- Automated invoice creation and distribution.
- Early invoicing.
- Automatic aging alerts.
- Built-in collections process that keeps customers happy.
Traditional industry processes:
Most traditional factoring companies don’t generate invoices for brokers automatically, and opt to send generic emails instead. These emails are often impossible to customize and confuse shippers without specific company logos or identification.
Many traditional factoring companies also have very limited communication and lack comprehensive escalation processes. They frequently send one or two email reminders, and then charge a chargeback, causing issues with customers.
This lack of a collection process hurts customer relationships and costs brokers business.
Payments
Managing payments is an essential part of every brokerage, and doing it well is critical to the broker-carrier relationship. Denim provides improved processes over other providers in the space:
Denim’s payments:
Denim makes payments to carriers for you automatically, and gives brokers control over every aspect. Brokers choose how carriers are paid (e.g. ACH, check, QuickPay, and more) with no additional fees.
Denim also takes care of all the collection and storage of payment information on your behalf, so you never have to worry about storing sensitive personal carrier data on your system.
Key benefits:
- Automated payments with unparalleled control.
- Save payment info and important documents securely.
Traditional factoring companies:
Most traditional factoring companies don’t automate payments to carriers. Brokers are responsible for paying out carriers, requiring them to use additional back-office resources.
This can frequently lead to delayed or late payments, and unhappy carriers as a result.
Many traditional factoring companies also charge excess fees for common services like QuickPay or ACH transfers. The fees vary from factoring company to factoring company, but often must either be absorbed by the broker or passed along to carriers who desire QuickPay. These fees can range from 1-3% of the load, which can quickly eat into the profitability of your brokerage.
Conclusion
Brokers depend on cash flow and efficiency to grow their business. Without a suite of back-office tools to support your operation, you may find yourself paying excess fees, stuck manually invoicing shippers and paying carriers, processing paperwork, chasing down important metrics, manually compiling PDFs for job submissions, and more.
With Denim’s suite of back-office tools, your brokerage will be ahead of the curve with more efficient processes, streamlined communications, and fewer fees. Denim’s all-in-one platform is designed to meet the needs of brokers of any size, and sets a new standard for the factoring industry.
If you’re ready to find out how Denim can streamline your business, cut down on fees, improve your cash flow, and help your brokerage grow - get in touch with our team today. We’ll walk you through every step of the process and give you the tools you need to maximize your cash flow and streamline operations almost overnight.
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