Previously in this series: Pricing transparency, contract terms and more to consider in variety of factoring arrangements
Just as truckers have benefited from the online portals that factoring companies have opened to their clients for credit checks and other services, in some cases the brokers factors collect from have benefited, too.
Apex Capital’s Brian Carlgren says his company has been getting referrals of trucker clients from brokers “because we’re easy to work with. We don’t call you for every invoice to verify it. … Brokers get a dedicated account representative with us also.” A website gives them a central place to log in and “pull paperwork and compliance documents within our system.”
Such approaches among factoring companies have led to changing attitudes among brokers about factoring companies — long considered a nuisance for aggressive, frequent collections calls. But it’s not all fun and games.
California-based produce broker Pam Young notes that “some are better than others, but many of them hire some very annoying people. They ask questions that make no sense, so the answers we provide do not clear their confusion. They keep asking the same question. Frustrating, to say the least.”
Too many don’t seem to respect the agreement the carrier has with the broker. If an agreement notes a hard 30 days to pay, “the factoring company starts calling at 15 days,” she offers as an example.
Some carriers that work closely with Pam Young and Company have decided “to go around their factoring companies because of problems those companies created between the carrier and us.”
Young offers advice to carriers hopeful of preserving good relationships with their brokers while benefiting from the fast cash a factor can provide:
• Read reviews on different companies before choosing one.
• Once the relationship begins, monitor how the factor handles customers in terms of communication.
• Mind how the factor processes bills of lading.
“We had a carrier who would send in bills,” necessary for Young to collect from her shipper, she notes. The carrier’s factor, however, held BOLs “until they had a set of them. We could not start billing until we got the packet,” delaying their own billing process and payment to the factor. This could affect reserve account releases to the carrier, depending on the terms of the factoring arrangement.
Next in this series: Brokers embracing mobile-payment platforms