As more signs in the truck freight market point to decreasing demand and excess capacity, brokers are looking for better ways to increase the efficiency of their back-office operations to remain competitive and grow their business.
Most brokers require at least one or two employees dedicated to cutting checks, stuffing and sending out envelopes, verifying and approving paperwork, and making sure bank reconciliation matches within their accounting system. If a carrier calls to say their payment is incorrect, they must deal with that resolution process as well.
“Imagine having an employee making $15 an hour, and their entire job is to get invoices processed,” Kate Juliao, vice president of operations for TriumphPay, told FreightWaves.
“Not only do you have the accounts payable person working on one load, but you may also have the dispatcher, and the person responsible for carrier recruitment involved in onboarding the carrier for that load. What’s the net profit that a broker makes after using all those individuals to get that load paid? That’s why knowing your cost-per-invoice is crucial to producing as many back-office efficiencies as possible.”
TriumphPay’s carrier-payment processing technology’s ability to generate cost efficiencies has allowed Cincinnati, Ohio-based truck brokerage Logikor to see a significant reduction in mailing costs. “We tended to be still somewhat check-heavy, whereas TriumphPay’s entire ecosystem is built around payments and is very flexible,” said Logikor Chief Financial Officer Paul Silk. “Instead of us having to cut 50 checks a day, now there is one pre-authorized debit from TriumphPay. So from a bank reconciliation perspective, it has brought real efficiency to our back office.”
Silk added that by Logikor feeding load information into TriumphPay’s portal, the factoring companies and carriers he uses that log-in to TriumphPay can see that information and conduct rate validations, thereby avoiding having to call Logikor’s team. “And that’s fantastic, because we’re starting to see fewer payment inquiries and fewer load validations where factors are looking for rate inquiries.”
With less demand on in-house resources – particularly on accounts payable – Salt Lake City, Utah-based brokerage ShipEx Logistics was able to avoid hiring a replacement for an accounts payable employee, and could instead allocate resources to where they would generate revenue.
“The back-office efficiencies that TriumphPay brings has allowed us to put a lot more of our efforts into areas that need our immediate attention, or in areas we haven’t been able to focus on as much because of the demand on accounts payable that we had before,” ShipEx Logistics’ director of operations, Jonathan Homer, told FreightWaves. “We can have employees focus instead on collections or work through claims – things that allow us to get money into our system.”
TriumphPay brings the benefits of being an operating subsidiary of a publicly traded financial institution, Triumph Bancorp, Inc. (NASDAQ: TBK) and a transportation-focused solution with over 70,000 carriers on the platform.
Brokers receive the convenience of keeping the transportation management systems (TMS) and accounting systems they currently use. TriumphPay is already fully integrated with several platforms, including MercuryGate, McLeod, Aljex, TMW, Revenova, Oracle, QuickBooks and GreatPlains, with more to follow. It has a development team on staff that can also build custom integrations to support proprietary TMS solutions.
Juliao explained that the TriumphPay team takes over once a specific invoice has been approved for payment within the broker’s TMS or accounting system. TriumphPay allows carriers to see precisely which approved payments will be coming to them, as well as when they are scheduled for payment. Before the carrier payment goes out, they can review the amount and the load information that’s documented with the specific load and broker.
“That gives carriers an advance preview of what’s going to be paid out to them, and the ability to change, if they prefer, from a standard payment term to a QuickPay term,” she said. “It takes over much of the manual work that the broker’s accounts payable teams are having to deal with.”
Juliao said that at TriumphPay, technology is considered a way to provide efficiency so that employees can do their jobs better. “We’re not going to wake up tomorrow and robots are going to be doing carrier payments. We’re providing a way to make their job more effective.”
The brokers’ carrier partners are noticing that change as well. “Some of these carriers can be quite demanding as far as getting information right away, so it was amazing to see how quickly they bought into the process,” Homer said.
“Being a carrier is a tough business in itself, and if we can make it easier for them to manage their finances and their operation, that improves them as a carrier and improves the industry, and that’s a win for everybody.”