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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. 

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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.

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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.

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Step 1: Find Your Average Days to Pay for a Carrier’s Factoring Company

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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:

1. Gather your payment records for the past few months for each carrier.
2. Calculate the number of days between the invoice date and the payment date for each transaction. If you factor with Denim, we can pull this report for you.
3. Calculate the average of these days per carrier.

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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.

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Step 2: Understand the Average Days to Pay for Carriers' Factoring Companies

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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.

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Here's why this happens:

• Factoring companies compile a list of invoices that are past the debtor’s average days to pay each month. This raises red flags for carrier factoring companies because any variance outside of average days to pay could be a sign of cash flow or liquidity issues.
• If you appear on this list, you will be subjected to increased follow-up calls and emails.

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.

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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.

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Step 3: Shift Payment to Net-30 Days, If Contractually Feasible

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One strategic way to reduce calls is by shifting your payment terms to Net-30 days, if possible. This approach offers several benefits:

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Flexibility

You have more time to manage cash flow and handle unexpected delays without immediate pressure from factoring companies.

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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.

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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.

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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. 

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What About Your Credit?

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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. 

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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.

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Will Delaying Payment Impact My Carrier Relationships?

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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.

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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. 

Reduce Carrier Factoring Calls With Denim

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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.

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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. 

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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. 

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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. 

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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.

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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. 

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Here are some questions you should ask to ensure that you partner with the best fleet factoring company for your needs.

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.

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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. 

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Building strong carrier relationships starts with streamlined onboarding and communication. Completing the due diligence at the beginning will help avoid problems later on. 

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Here's a detailed look at how you can improve your carrier onboarding process. This will boost efficiency and build stronger relationships.

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What is Carrier Onboarding?

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Carrier onboarding refers to freight brokers' meticulously verifying and approving new carriers. 

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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.

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Common pain points during carrier onboarding:

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Carrier onboarding can present several challenges. Understanding these pain points can help you develop a more efficient process:

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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.

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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.

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Securely Managing Payment Information:
Proper handling of this data can prevent delays and, more importantly, establish trust with your carriers.

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5 strategies to improve carrier onboarding

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Implementing effective strategies can significantly enhance your carrier onboarding process. Here are five key strategies to consider:

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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.  

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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.

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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.

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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. 

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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.

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Streamline Carrier Onboarding with Faster Payments

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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.

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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.

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Denim's new integrations with Highway and MyCarrierPortal further streamline onboarding, making it easier than ever to vet carriers and set them up for payment. Carrier details are automatically imported from these platforms into Denim, connecting onboarding from compliance checks to fast payments—all in one seamless workflow.

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To learn more about how Denim can help optimize your carrier payments and streamline your onboarding process, get started today.

When running a successful brokerage, the last thing you want is for your staff to stop selling and get bogged down in paperwork. Unfortunately, that’s the reality for most brokerages, especially those with small teams wearing many hats.

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Without the right tools, staff members often spend countless hours handling documents instead of focusing on growth-driving activities. This leads to key team members spending hours downloading and re-uploading thousands of documents daily when they could spend their time elsewhere. 

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The following case studies demonstrate how Denim customers use our payments platform to automate their back-office, scale their brokerage, and save hours spent processing payments.

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How Peregrine Scaled Their Brokerage to $15 Million Without Additional Headcount

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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.

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Peregrine’s Challenges:

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Peregrine runs a tight ship with just 8 staff and knew they couldn’t have their valuable team members stuck processing paperwork. 

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Before working with a factoring company, documents were manually downloaded and reviewed for invoice creation and payments to carriers. This tedious and error-prone process had just one person to process over 1,200 invoices every month.

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Peregrine also ran into a cash crunch every month in an attempt to pay carriers quickly, eating into their cash reserves while waiting for customers to pay their invoices.

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Denim’s Solution:

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Peregrine decided that manual invoicing and payments were taking far too much of their small team’s time, and decided to seek a solution through Denim. By leveraging Denim’s automated invoicing tools, TMS integrations, and factoring services, Peregrine improved invoice processing time by 3x, reduced human errors, and improved their cash flow.

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Denim worked with Peregrine to create an automated workflow that seamlessly transfers jobs from their TMS automatically. These efficiency gains allowed Peregrine to scale up to $12-15 million without adding additional back-office staff, all while keeping both carriers and customers happier than ever.

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How Yeti Logistics Used Integrations to Cut Expenses and Reduce Invoice Processing Time By 75%

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Yeti Logistics, like many brokers in a post-COVID world, was forced to operate on tighter margins in recent years. Despite these economic challenges, they were determined to grow and scale their company. 

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Yeti Logistics’ Challenges: 

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The team at Yeti Logistics had the right idea - they had implemented technology solutions into their business to speed up their operation and reduce costs. Unfortunately, the freight tech solutions they were using were all siloed systems, without any interconnectivity.

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This lack of communication between software systems left Yeti’s team scrambling every day to enter shipment data manually into multiple systems, spreadsheets, and platforms. 

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“I would have to download the carrier documents from my TMS, transcribe them into an Excel spreadsheet, upload it to our previous factoring company's dashboard, and then complete the process with exception management." - James Dockery, Yeti Logistics

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With this painstaking manual process in place, it seemed almost impossible to scale their business without adding more staff, which would cut further into already shrinking margins.

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How Yeti Logistics Cut Costs and Improved Efficiency:

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Like most brokers, Yeti used their TMS as their central hub for everything in their brokerage. Their current inefficiencies came through a lack of integration between their TMS and outdated factoring platform - causing redundant manual entry for every load.

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When Yeti switched to Denim, we quickly established an integration with their EKA TMS, cutting redundant data entry by 75% almost overnight. This new automated workflow reduced invoice processing time and nearly eliminated the need to switch between platforms.

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With Denim’s flexible factoring solutions, Yeti Logistics also cut their factoring costs by 18%, saving them tens of thousands every year. 

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How Alliance Logistix Increased Volume by 35% While Improving Carrier and Customer Relationships

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Alliance Logistix is a rapidly growing brokerage and faces the many challenges that it brings. They were swamped under a constant barrage of new paperwork, and knew there had to be a better way.

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Alliance’s Challenges:

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Before implementing a tech-forward factoring platform, the Alliance Logistix team was spending upwards of 266 hours every month on AP. They were struggling to keep carriers happy because this extra processing time meant payments were slowing down and eating into cash reserves.

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"Ensuring my team gets their paycheck is crucial, but it is equally, if not more, vital for the drivers to receive their payment swiftly." -Natalie Schick, Alliance Logistix. 

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A lack of efficient payment procedures threatened their hard-earned standing among their carriers.

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How Denim Streamlined Freight Paperwork and Improved Cash Flow:

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With flexible factoring to manage their high load volume, seamless integration with their TMS, and new tools like carrier QuickPay, Denim’s freight payment platform gave Alliance Logistix everything they needed.

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Staff went from spending 8 minutes per invoice down to just 3 minutes, cutting invoice processing time by 62%. This time savings alone allowed Alliance to reassign staff from accounting to dispatch, resulting in a 35% month-over-month increase in load volumes.

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Flexible factoring services allowed Alliance to retain clients who were eating into their cash flow with extended 90-day terms. New QuickPay solutions also dramatically cut carrier calls about payments from 5+ per day down to as little as 2 calls per quarter!

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These new processes gave Alliance Logistix the tools they needed to grow their business and improve customer and carrier relationships, all without adding additional staff.

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Conclusion

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Freight software and technology should enable your brokerage to grow, not bog down your operation. That’s why we emphasize seamless integrations between Denim’s world-class tech-forward freight factoring platform and the systems you’re already using.

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With results like these, Denim customers have seen gains in efficiency, cut invoice processing time, reduced redundant data entry, cut costs by 18% or more, and helped brokerages like yours scale to new heights without adding additional head count.

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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.

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Software has become an essential piece of every freight brokerage. In many businesses, software and technology has become integrated into almost every piece of the shipping process: pricing loads for customers, vetting carriers, identifying routes, coordinating with your team, managing documents, accounting, payments, and more.

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With a greater and greater dependence on software, more brokers are getting bogged down in tech overload. Sometimes brokers are using software to automate tasks that shouldn’t be, or using it as a patchwork fix for underlying organizational issues. Others may find that they have too many systems and apps, some with overlapping functionality, and aren't sure which are essential and which can be ditched.

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In this software deep dive we’ll explore the most essential pieces of freight broker software, what it should be used for (and which pieces of tech can be skipped), how some essential pieces of software can rapidly improve your brokerage’s revenue and profitability, and more. We’ll also review some of our favorite providers for today’s modern SmartBroker, so you know exactly where to go for the latest and greatest in freight tech.

Load boards have become an essential resource for freight brokers across the country. They are indispensable tools that help brokers quickly and efficiently locate carriers and connect them with new loads. The top load boards for brokers are full-service tools to find carriers, build new relationships, expand your business, and more.

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Since load boards are such an essential piece of every brokerage, we thought brokers might benefit from our top 3 best load boards for freight brokers, and why we’ve chosen these boards over the many options out there. 

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Does it feel like your team is constantly bouncing between one software or another to get the full picture of your brokerage? Every modern freight broker uses software and technology to enhance their operations, but sometimes it seems like these systems can cause almost as much pain as they solve when you need six different logins just to find out the status of a load.

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That’s where freight software integrations come in. Integrating your tech stack so all of your software communicates with each other is no longer an option - it’s a necessity. If you feel like you or your team are getting bogged down in redundant systems that all only give one small piece of the logistics puzzle, it may be time to re-evaluate your brokerage’s software integrations. 

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In this article we’ll review the importance of integrating all of your brokerage’s software systems into one cohesive ecosystem. Creating these integrations makes it easy to find information at a glance, and gives you and your team the time back that they spend swapping between systems, reduces erroneous or double entries of information, and more. 

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All integrations aren’t created equal, though. When integrating your systems it’s important to keep in mind your brokerage’s existing workflows and systems, and ensure that these integrations work FOR you, not against you. If an integration isn’t set up correctly, you may find data is entered incorrectly, is stored in the wrong place, or isn’t updated in every system, causing confusion and bogging down your operation. Keep reading to find out exactly what needs to happen to ensure your systems are integrated correctly, efficiently, and in a way that helps your freight brokerage grow.

Sales representatives should be selling. Not spending hours on administrative work. The lack of synchronization between your TMS (transportation management system) and full technology stack causes unnecessary friction between your billing department and reps. TMS integrations can save your reps hours that they can use to hit the phones.  

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A TMS is an essential part of every brokerage. Most brokers spend a significant amount of time inside their TMS, but don’t realize it could be providing even more to their business through third-party software integrations. 

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When a broker’s TMS is integrated with the rest of their tech stack, brokers and their staff can gain new insights, instantly access information across their organization, and improve efficiency significantly.

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Below we’ll cover some of the most important TMS integrations, how your TMS can integrate with payments and factoring even if there isn’t an “official” integration, and what to do if your TMS doesn’t integrate with these essential systems.

The logistics industry faces a growing menace - double brokering. 

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This deceptive practice involves fraudulent intermediaries, posing as genuine carriers or brokers, who subcontract jobs without the shipper's awareness or approval. The repercussions of this fraud include delayed deliveries, lost revenue, and potential legal complications.

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Recent reports indicate a concerning trend: TIA has reported a staggering 200% increase in double brokering cases last year. As noted by Anne Reinke, TIA's President and CEO, in an interview with Vishnu Rajamanickam, an oversaturated market has led to "too many carriers chasing less freight," contributing to double brokering.

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The stakes are high. 

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Double brokering is not just deceitful - it's illegal. The practice can cost your freight brokerage time and money and tarnish your reputation. 

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This article aims to arm you with crucial information to identify and prevent this industry menace. We'll explore the mechanics and consequences of double brokering, equipping you with the knowledge to safeguard your operations and maintain the industry's integrity.

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What is a double broker? 

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A double broker is a fraudulent intermediary who claims to be able to arrange transportation services but instead subcontracts the job to another carrier or broker without the shipper's knowledge. 

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There are two common instances:

1. Double broker posing as a freight broker.
2. Double broker posing as a carrier.

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Double Broker Posing as a Freight Broker

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There are instances of double brokering when a broker, who has already agreed to transport a shipment, gives the job to another broker without the permission or knowledge of the shipper. The result is a long chain of intermediaries, each taking a cut of the profits, ultimately reducing the carrier's earnings and increasing the shipper's costs.

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Double Broker Posing as a Carrier

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Double brokering can also occur when a broker arranges for a "carrier" to transport a load, but that "carrier" then outsources the task to another carrier for a reduced rate. The first carrier keeps the price difference without informing the initiating broker about the change. As a result, the broker remains unaware of the second carrier's safety record, insurance coverage, and other potential legal issues until problems arise. 

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In some cases, the carrier that transports the cargo doesn't receive payment from the carrier involved in double brokering. If the shipper who initiated the shipment receives complaints about non-payment, it can result in a complicated dispute involving three or four parties, including the broker.

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Identifying Double Brokers  

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Spotting and preventing double brokering is an essential skill for all stakeholders at every level of a company. By being watchful and proactive, industry participants can foster an environment of trust and fairness, safeguarding the industry's future and reinforcing its reputation for excellence.

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Vetting your Carriers 

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To avoid double brokering, working within your established carrier network is preferable. However, sometimes new clients require carriers out of network with specific equipment. It is crucial to evaluate new carriers thoroughly.

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There isn't a single tell-tale sign of a double broker, but certain key factors can help differentiate between potential double brokers and reputable carriers.

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Suggested Vetting Criteria:

1. Business longevity - The easy setup of carrier authority leads to new MC numbers daily. Opting for carriers with longer business histories helps minimize double-brokering risks and promotes the safe transportation of goods.
2. Safety record analysis - Carriers with multiple trucks should have had at least one inspection in the last year.
3. Business address verification - Cross-check their address using tools like HaulHero and TIA Watchdog to ensure it's not a non-business location like a convenience store. 
4. Phone number and email validation using SAFER or Carrier 411 - If there's a mismatch, contact the listed number to discuss the load due to potential identity theft concerns.
5. DAT Directory Seat - Refer to the DAT directory to verify an MC's DAT seat.

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Though not exhaustive, this list serves as a solid foundation. Freight brokers should consider using tools like Carrier 411, Highway, TIA Watchdog, RMIS and Freight Validate. Each brokerage should develop a specific vetting process for new carriers. We can help eliminate double brokers and foster collaboration with authentic, industrious logistics companies by remaining diligent.

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Common Red Flags of a Double Broker

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Navigating the logistics industry requires keen attention to potential red flags that might signify the presence of double brokers. Here are some warning signs to watch out for and the appropriate steps to take if you encounter them:

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Red Flag: Call Center Background Noise

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You're talking to a carrier or dispatcher about a load, and the background noise sounds like a call center. For carriers that claim only 1 or 2 trucks in their fleet, it's even more suspicious if it sounds like a call center. 

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What to do: Do your research. Look for inconsistencies in their authority length, number of power units registered, number of inspections, or reports on Highway, Carrier 411, or TIA Watchdog.

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Red Flag: No haggling

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Negotiating rates is a common practice in the logistics industry. If a carrier does not negotiate, particularly when offered a low rate, it's important to be skeptical, even during a freight recession.

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What to do: Run the lane in DAT or your preferred load board to see if somebody reposted it.

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Red Flag: Driver using gmail

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The driver requested you send the carrier packet to a random Gmail instead of a company email. Be more suspicious when the driver is part of a larger trucking company or fleet. 

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What to do: Call the carrier's company to verify the driver is associated with them and that the email is correct.

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Red Flag: Driver refuses to talk on the phone

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Verifying the driver and carrier before a load is good form. However, if the driver refuses to talk on the phone or a dispatcher refuses to give you driver information, you might have a double broker. Texting and email ONLY are big red flags. 

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What to do: Call the driver's phone number and see if a voicemail is set up. Many double brokers use free texting apps like TextNow or Google Voice for their drivers' numbers. Calling those will send you straight to voicemail or won't have a voicemail created.

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Preventing Double Brokering for a More Trustworthy Logistics Industry

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Double brokering presents a significant challenge within the freight and logistics industry. It undermines trust between carriers and brokers and can lead to a host of issues. Double brokers add an unnecessary layer of complication, often leading to inefficiencies and disruptions that harm service providers and clients.

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However, it is essential to remember that the burden of combating double brokering does not lie solely with individual businesses. Double brokering is an industry-wide issue that calls for an industry-wide response. We urge all players in the freight and logistics sector to take a stand against double brokering by investing in practical tools and resources, developing strict vetting criteria, and maintaining a culture of transparency and ethical practice. Together, we can make strides in eradicating double brokering and fostering a more trustworthy and efficient logistics industry.

Brokers from all over the country are beginning to experience shrinking margins. With the uncertainty of the economy, margins have been declining for the last several years, and brokers are struggling. 

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On top of these recent declines, a recent sentiment analysis by Freight Waves shows broker confidence in near-term profitability approaching all-time lows.

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(Image courtesy Freight Waves)

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This lack of confidence can be attributed to a myriad of issues in the freight industry, such as overcapacity, carriers passing increased costs along to brokers, declining spot rates, and more.

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Below we’ll review four ways brokers can stay lean by cutting costs and improving efficiency, adding new revenue sources, and expanding their business to maximize margins.

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1. Maximize employee efficiency 

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It’s impossible to ignore employee inefficiencies when speaking about shrinking margins. Most brokerage employees spend significant time on mundane tasks that distract from more important activities that drive revenue.

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This is especially true when personnel who could be finding new business are instead bogged down with automatable tasks such as data entry or document organization.

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Action: How to Improve Employee Efficiency

1. Automate Manual Tasks: Implement automation tools into your business to dramatically reduce the amount of time employees spend on data entry, document sorting, and more - freeing up their time to focus on activities that add value to the business.
   
   
2. Prioritize Software Integrations: Many brokers are stuck using outdated software systems that aren’t integrated, causing slow and painful processes. Consider switching to new providers that integrate with your most important tools, such as your TMS,  accounting software, factoring company, and loadboard.
   
   
3. Prioritize User-Friendly Tech: When changing or updating your software systems, ensure you’re choosing software that values simple, user-friendly interfaces. Transitioning to new software can be challenging for everyone involved, and software tools will only improve your operation if your staff uses them.
   
   
4. Use the tools available to you: Most brokers use a factoring company to ensure their carriers are paid quickly and efficiently, but don’t use all of the features they’re already paying for. Leveraging your factoring company’s invoicing and collections process can improve efficiency and take tasks off the plate of employees.
   
   
5. Leverage AI when possible: With new AI tools coming onto the market, there are many ways to improve employee efficiency and even eliminate some tasks. For example, with Denim’s AI-powered auditing system, manual document auditing can be almost entirely automated.

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Result: By reducing, automating, and eliminating time-sucking tasks like these, you can ensure your best employees are spending more time focused on sales and client engagement, directly contributing to improving your brokerage’s margins. 

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2. Monetize QuickPay 

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Brokers aren’t the only ones experiencing tight margins - carriers are starting to feel the pain too. These increased carrier costs are then passed back to brokers, making the problem even worse. 

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With these increased costs, brokers should consider adding a new revenue stream through a QuickPay fee - allowing carriers to choose between faster payments and lower fees. 

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Action: How can brokers counteract shrinking margins caused by increased carrier costs?

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Brokers can counteract increased carrier costs by monetizing quickpay. This gives your brokerage a new revenue stream by charging a fee for faster payments. 

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Carriers who are increasing their prices are given a choice: cut into that margin to receive payment faster, or maintain their margins and stick with an extended payment schedule.

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Note: Some factoring companies such as Denim, don’t charge brokers a fee for making QuickPay available to carriers, meaning brokers get to take home 100% of the proceeds for any QuickPay revenue.

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Result: Adding a QuickPay fee helps brokers improve their margins by adding a new revenue stream that is 100% profit. Many carriers are used to QuickPay fees, and will often choose to pay a small fee to receive payments in days instead of weeks. This new revenue stream can be essential in combating shrinking margins for brokerages.

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3. Negotiate Payment Terms With Clients 

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Rates are only one piece of the puzzle when it comes to negotiating contracts with your shippers. Negotiating payment terms can be just as lucrative as negotiating rates for your business. 

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If your shipper’s payment terms are over 30+ days, you have some negotiating to do. Money in the bank better serves your brokerage instead of money held up by a client. Borrowing money against these shippers through invoice factoring is also more costly the longer the payment terms. These payment terms can have a significant impact on your margins and cash flow, and only exacerbate the issues caused by outside influences.

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Action: How to negotiate payment terms with customers to improve margins

• Update contract terms to improve cash flow:some text
  • Most brokers are stuck with contracts that encourage customers to slow-walk payments to brokers, leaving them stuck holding the bag when carriers need to be paid. 
  • Updating your contract terms to encourage faster payments can massively improve your cash flow, even if your brokerage needs to offer customers a slight discount to do so.

Every broker knows that keeping a close eye on your cash flow is an essential piece of the business. Without careful monitoring, it’s easy to let costs balloon out of control and for economic forces to have their way with your business.

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A Profit and Loss (P&L) Statement is a tool used by brokerages of every size to monitor and understand the financial health of your business. This document may also be referred to as an income statement, and provides a clear snapshot of your company’s revenues and expenses over a specific period. This makes a P&L statement a vital tool to gauge your operations performance, make informed decisions, and plan for future growth.

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Read on to learn how to put together a P&L.