Factoring vs. Direct Pay: Getting paid timely & correctly
For truckers, using a factoring company can be a good way to get paid for their work quickly. What exactly does a factoring company do? They provide the upfront funds that carriers are to be paid by the customer, which can sometimes be anywhere from 30-60 days later. The customer then pays the factoring company instead of the carrier. The catch is that a fee is charged for the service provided. If you’re willing to pay the fee, it can be a great way to avoid getting in the weeds with the company that is paying for your services, and the delays that usually come with those payments.
On top of the fees, the problem with factoring companies is that there’s a complete reliance on a third-party in order to properly get paid. This is especially troubling if the factoring company has unethical business practices, and the carrier company ends up stuck in a contract with them. No one wants an untrustworthy organization taking care of the most important part of maintaining a business: the money.
The direct pay route
However, with DrayNow, carriers don’t even need to utilize the services of a factoring company. DrayNow offers a direct pay option where the money a trucker has earned on a load will be paid out directly to their bank account within a week after completing it. How much does it cost? Absolutely nothing. On top of the all-in pricing seen on the platform, there are no fees taken out for direct pay.
In using the DrayNow platform, you are able to use a factoring company to get paid. But why spend the extra money when we pay out within a week? Let’s say that you complete a load through DrayNow between Sunday and Saturday – one whole week. With direct pay, you’d be compensated the following Wednesday. Think about that. Completing a load on a Saturday could get you payment in four days. Without any fees taken out.
But first…upload your documents!
The key to getting paid in a timely manner is to get those bill of lading (BOL) and proof of delivery (POD) documents in right after receiving them. Using DrayNow, documents are scanned and uploaded right onto the platform, where they are available in an instant. There’s no need to scan and email them, or even send through the mail. The carrier just needs to remember to send them over right away so that everyone has proof of completion, and payment can occur as soon as possible.
At DrayNow, we are trying to innovate and simplify the entire process of carriers finding and hauling intermodal freight. Between the direct pay option and instant document upload, carriers are given the tools necessary to successfully complete loads and get paid in no time.
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