Categories
Clearing The Paper Backlog That Keeps Truckers From Timely B2B Payments

Clearing The Paper Backlog That Keeps Truckers From Timely B2B Payments

June 14, 2021 at 01:00PM
by PYMNTS

The construction arena has seen an influx of FinTech innovation in recent years, thanks to some glaring pain points affecting the industry.

It’s a complex market with many moving parts, not to mention the added layer of complexity that results from having to manage workflows both on-site and in remote offices. The coordination required to ensure that payments are exchanging hands accurately is immense, and technology has stepped in to connect the dots.

But there are still plenty of gaps in the construction industry that remain filled with paper documents, particularly when it comes to the paperwork that must exchange hands before any payment is made. One key pain point can be found in trucking, with significant friction related to the coordination of transporting materials to and from a construction site.

Speaking with PYMNTS, Tom Spencer, chief revenue officer of Trux, described this particular workflow as “almost a hidden market.” With Trux recently launching a Software-as-a-Service platform designed to facilitate the coordination of these workflows, as well as B2B payments to trucking companies, the FinTech arena is beginning to set its sights on the sector.

A Coordinated Effort

Trucking is an integral component of any successful construction project. “It’s foundational to be able to move materials,” said Spencer. “With what’s on the horizon, and with these potential infrastructure bills, there’s going to be even more stress and pressure to move more material.”

Indeed, while the Biden administration pushes for the passage of an infrastructure bill, truckers operating in the construction space already have their hands full. Often, they’re filled with paper, as documentation is a critical component of booking loads, confirming job completion and enabling payment.

Construction companies and materials producers often work with the same trucking providers on a recurring basis, and Trux stepped onto the market to facilitate those connections in a digital fashion — and to help businesses connect to new partners. But finding a truck, or booking a job, is only the beginning of an arduous — and traditionally manual — process.

Spencer explained that this industry is a high-volume environment that demands transparency and efficiency. He offered the example of a producer that is selling materials that need to be delivered to a construction site. That job actually begins at the point of sale, in which a sales order ultimately turns into a dispatch order for a driver to deliver the product.

Dispatchers must be able to coordinate and schedule drivers and understand how many trucks they need, as well as how many days it will take to complete a job. They must also be able to adjust capacity and schedules in real time as projects progress. All of this tends to depend on paper tickets and physical documentation — and is an integral component of Trux’s efforts to digitize these workflows in a unified platform.

Clearing The Payment Backlog

Dispatch orders and other related documents can be digitized to coordinate the scheduling and completion of a job, but when it comes time to facilitate payment, there’s even more paperwork in the mix.

Everything from truck weight tickets to documents validating that a job has been completed can potentially be digitized in a variety of ways, whether by taking a picture of that scale ticket or through automatically generated online documents. In terms of the movement of funds, Trux is deploying a strategy increasingly seen in other truck-related industries, like over-the-road freight and fleet operations. The platform is able to step in as a middleman and make a payment to a trucking firm within seven to 10 days — significantly sooner than the weeks it can typically take — while still allowing end clients to take the time they need to pay.

When operations are focused on a government project, Spencer said those B2B payment cycles can be even longer, thanks to — you guessed it — more documentation requirements. “There are some larger companies that appreciate the pressure on cash flow and meet the payment cycle of seven to 10 days,” he said. “But there is also government work with certified payments that require certain compliance documentation before a government project would be funded. And that can take as long as 45 to 60 days.”

These payment cycles can vary greatly according to the variety of trucking operations on the market, whether those are independent operations or fleets that manage 1,000 trucks a day. With each business having its own cash flow challenges, the ability to ensure that payments are made on time is critical.

Trux is gearing up to expand its B2B payment functionality on its SaaS platform in the future. For now, though, the portal’s ability to facilitate payment, automate workflows and consolidate operational data on a unified interface is an effort to move the digitization needle forward in the construction arena — one that Spencer said has notoriously lagged in modernization efforts.

In order for technology to be successful, it must not only solve key pain points, but must also lower as many barriers to adoption as possible. “At the end of the day, it has to be really easy to use, the solutions have to be intuitive and there has to be a real benefit for drivers, fleets and construction companies,” Spencer said.