Alrighty. Thank you for joining us for module fifteen, which discusses invoicing and factoring and how this is relative to what we do as dispatchers. Invoicing is one of the most critical ends of the dispatching process because without that, the driver can't get paid. We can't get paid if that's done incorrectly. So invoicing and also factoring primarily applies to the driver and how they choose to get paid, whether it's on the terms of the shipper and the broker, and that could be anywhere from thirty five to forty five days. So in essence, a driver might if he chooses not to obtain a factoring company, He might have to wait anywhere from thirty five to forty five days after he completes a load to get paid for that load. But with the assistance of a factoring company, he can get paid in a much quicker time, sometimes the same day, sometimes the next day. So it all just depends. But let's take a look at invoicing and factoring. Once the load is delivered. okay ultimately two different things can happen they're both gonna end up they both have the same goal which is to get paid and depending on whether or not it's from a broker or a shipper can just determine that overall process okay so we'll talk about what happens once a load is delivered from that we've taken from a broker okay we'll start there So once the load is delivered, a couple of different things can happen. Either the carrier will invoice the broker directly, okay, or the carrier will submit paperwork, which is the rate confirmation and BOL to their factoring company so they can get paid immediately. And the factoring company will invoice the broker. Okay. So I know that's kind of confusing. We're going to talk about that whole process, but just, just stay with me. Just follow me. Okay. So let's just say hypothetically, there is no fact that the carrier does not use a factoring company. Okay. Uh, if there is no factoring company for the carrier, the carrier would send an invoice directly to the broker. Okay. They're saying, hey, we've delivered the load. Here's our bill. Pay us, okay? And now while I'm on that, let me say this. Depending on your job as a dispatcher for whatever carrier company you're working with or helping to dispatch, your level of service can vary. Sometimes dispatch companies simply provide dispatch services. which means all you're doing is helping them find loads. But some dispatch companies offer additional services. They take it to the next level and say, Well, not only will we find loads for you will handle your all your back end paperwork as well okay so ultimately it's up to you to decide what type of level of service, you want to provide. As a dispatch company Okay, you may want to just strictly find loads you may want to find loads and handle paperwork for drivers or you may want to offer both and just charge accordingly for both services okay so just keep that in mind so with this particular. discussion we're having, in the event that you did handle back-end paperwork for your carrier, this could be you invoicing the broker. If you don't provide paperwork services, then the carrier will send those invoices to the broker. But if this is something you've elected to do as a part of your business, then you would be sending invoices to the broker. So that's what happens first. And then what happens is that the broker will take an average of thirty to forty five days to make a payment or to pay you guys basically. Again, on average, it takes thirty to forty five days for a broker or brokerage to pay you once you have submitted an invoice to them. OK, that brokerage may or may not offer quick pay options. OK, so we'll talk about quick pay. Quitpay is basically a service that is offered by some brokers, not all. It's not a required service. It's just more of a convenient service, especially if you're in need of payment quickly, okay? If you got kids to feed and, you know, bills to pay and all that good stuff. So, If a brokerage does offer quick pay, that's basically a turnaround payment of one to two days, okay? But it's gonna cost you. If you elect to go for the quick pay option, they will charge you a rate reduction of anywhere from one percent all the way up to about five percent for the total cost of your load. So, you know, if you took a load from them for two thousand dollars, well, and you decide to take the quick pay option, they're going to take five percent of that load of that two thousand back from you. OK, so I have to be careful with that. And like I say, it just depends. The quick pay percentage just depends on the brokerage, but it is an option. OK, so that's that. Now, if they don't have a quick pay option and if the carrier, that driver does not have a sufficient amount of cash flow being to where he can go thirty or forty five days without having to worry about needing that money right there on end, he'll be fine. But if he does need that money and there's not a quick pay option available or even if there is, whether there is or there isn't, Just depending on what's going to be most cost effective, that carrier will probably elect to factor the load through their factoring company so that they can be paid sooner. And again, we'll talk about what factoring companies are here in just a bit, but I just kind of want to show you the breakdown of how this process works, okay? So again, let's just go through it one more time. The carrier will invoice the broker. Donna Williams- Possibly. Okay. If he does invoice the broker, it will take thirty to forty five days for that broker to pay the carrier on average. Donna Williams- If they have a quick if that brokerage has a quick pay option. That is an option for the carrier to take, which will allow them to be paid in one to two days with a reduction of one to five percent for the rate, okay? Now, if there is no quick pay option and that carrier needs the money immediately, that carrier will probably decide to factor the load through their factoring company if they have one, which most carriers will have a factoring company, okay? But that's the process. What a shipper wants the load is delivered. The carrier invoices the shipper. It's pretty much the same process. The carrier invoices the shipper. The shipper will take thirty to forty five days on average to pay the carrier. The carrier will probably elect to factor the load to be paid sooner. So basically, the only difference is shippers don't offer quick pay. That's just not a feature. I've never met one. I've never had a shipper that's offered that. So it's going to be pretty much the same process. It's just that brokers offer quick pay options because they know carriers need their money. Drivers need their money a lot sooner than thirty to forty five days. OK, so. Again, the carrier or you, you know, if you handle the paperwork for the carrier will invoice the shipper possibly and then the shipper. will take thirty to forty-five days to pay you out if you invoice the shipper, okay, without using a factoring company. But in the event that that's too long and your carrier needs to be paid instantly, then the carrier will probably elect to factor the load so that they can be paid immediately, okay? So that's what happens once the load is delivered. Now let's talk about what the heck is a factoring company, okay? So a factoring company specializes in invoice factoring or purchasing outstanding invoices from businesses that have slow paying customers such as the shippers or the brokers, okay? and are looking to boost their cash flow. This allows a business or a carrier to access cash immediately after issuing an invoice instead of waiting thirty to ninety days for the customer or shipper or broker to pay. Okay? So basically, a factoring company is a business that says, hey, we will pay you now and we'll just we'll send the invoice to your customer. OK, instead of you having to wait thirty to forty five days, we'll kind of play the middleman part. We'll pay you now and then we'll send that invoice to your customer now. and wait for them to pay us, okay? And that's what a factoring company is. Is there a fee for that? Absolutely, everything costs money, right? And so it really just depends. I think factoring, well, I don't think. Factoring companies take a percentage as well. Some factoring companies will take a percentage or they will just charge you a flat fee per month, okay? okay for their service so it really just depends and it's important for carriers to do their research on that so they can make sure uh they're getting you know the best deal for themselves what's going to work for them okay but that's what a factoring company is guys so the factoring process goes Instead of a carrier sending an invoice to the customer, which is the broker or the shipper, what will happen is if they're going to factor the load, the carrier will send the rate confirmation that they got from the shipper or the broker and the BOL that they received once they delivered the load to the factoring company. Okay. They're going to send the rate confirmation and the BOL to their factoring company. Say, here you go. This is the load that I took. This is how much they're supposed to be paying me. And here's the BOL, the receipt showing that I delivered the load. Okay. They give that to their factoring company. As soon as they give that to them, their factoring company pays them immediately. Okay. likely the same day, if not the same day, no later than the next business day. Factoring company says, here you go. Here's your check. You know, here's your money directly to deposit it into your account. Okay. The factoring company then takes that paperwork that the carrier gave them and submits it along with an invoice over to the broker or the shipper. And then they receive their payment in thirty to forty five days. Okay. So that is how that process works. Now, this is only important, again, if you decide to handle back-end paperwork as an additional service for your driver or your carrier company. It's important to have a good accounting software so that you can keep up with these invoices because, you know, once you get going, you're going to find yourself over your head and invoices and loads and bills and accounts payable and accounts due and things like that. So it's really important to have a good software system at hand. You certainly don't have to use either one of these. I just put them up to offer ideas for you that have no clue about any type of accounting software. I've never used QuickBooks, but I've heard lots of good things about it. I personally use ITS Dispatch, which is a product of TruckStop, which is the load board that I use as well. So you can tell, I just really love everything about TruckStop. ITS Dispatch is also a dispatch system. It's a dispatch system as well as an accounting system. So it's kind of like everything wrapped up into one. which is why I love it so much. So you can keep up with your carriers, all their loads, and you can keep up with accounting in there as well. So I just wanted to show these to you as potential options if you decide to go that way and offer, you know, paperwork, back-end support, is what they call it, for your drivers, okay? But that pretty much covers invoicing and factoring companies. This was a pretty short chapter. What we're gonna talk about next in the next chapter is the process of starting your own dispatch company, okay? We'll be talking about LLCs, EINs, how you go about soliciting new carriers for your business, all that type of good stuff, okay? So I'll see you guys on the other side. Okay. Okay. So that will complete our module on invoicing and factoring. That is very important in the life of a dispatcher. If you're to have a continued life in dispatching, that the invoicing is done in a proper and complete manner. Factoring is very beneficial for the driver. So we do have factoring options that are available. We don't personally do factoring for the drivers, but we have companies that we can recommend that we are affiliated with that will assist the driver in finding the right factoring company. So we have several that we are affiliated with. It's just all according to the driver and what his preferences are. And that's how invoicing and factoring works. So that will conclude this module on invoicing and factoring.