If you need to scale your fleet, contracting with 1099 drivers can be an affordable alternative to hiring full-time employees. Independent drivers often have years of experience, so be prepared to pay them well — and on time. Make the driver settlement process easy so you can retain your best contract drivers.
In this post, we’ll look at what’s wrong with the driver settlement process, how to make it better, and best practices for retaining your contract drivers.
Common Shortcomings of Driver Settlement
Even well-intentioned fleet owners run into problems when settling payments with drivers. Here are some common shortcomings that can hold back your growth:
Manual Paperwork
Relying on manual documentation and proof-of-delivery (POD) paperwork can cause payment delays. If drivers have to fax or email bills of lading and wait for someone in the office to process them, it slows everything down. A load might be delivered in a day, but if the paperwork sits on someone’s desk or gets lost in an email inbox for a week, the driver doesn’t get paid.
Waiting on Customer Payments
Some fleets delay paying their contractors until after the customer has paid the freight bill. This “pay when paid” approach might improve cash flow in the short term, but it means drivers could wait 30+ days to receive their earnings.
Inconsistent Pay Schedules
Drivers want to know when they’ll get paid. They have bills to pay, and when paydays are inconsistent, they may have difficulty covering their expenses. Most likely, they’ll choose to work for another fleet that pays them consistently.
How Technology Improves Driver Settlement
With the right technology, you can improve the driver settlement process and retain your best drivers. Here’s how PCS TMS for Carriers simplifies driver settlement:
Electronic Bills of Lading
PCS TMS includes a mobile app that lets drivers capture electronic BOLs and other delivery documentation on the spot. That means drivers don’t have to email or fax delivery documents before they get paid, and you can invoice the customer immediately and get paid faster.
Automated Payments
Long-haul truck drivers are on the road for days or weeks at a time. So when you mail paper checks to drivers, they might not be able to deposit them right away. PCS TMS accounting and payroll features let you automate driver settlements and directly deposit funds to driver accounts.
Automated digital payments save time for AP departments. There’s no need to collect a signature on a paper check or reconcile a payment once a driver cashes the check. Reconciliation happens as soon as the software transmits the payment.
Fewer Payment Inquiries
When you pay drivers automatically after they submit digital delivery documentation, they don’t need to contact you to ask where their check is. Plus, they can access all of their payment details within the mobile app, which makes it easier for them to manage their records.
Best Practices for Retaining Contract Drivers
In addition to paying drivers promptly, here are some other ways you can retain top talent:
Offer a Guaranteed Minimum
Treat your independent drivers like true partners by offering a guaranteed monthly, bi-weekly, or weekly minimum. Consistent, predictable pay means a lot to owner-operators. You may occasionally have to cover the difference between a driver’s actual earnings and guaranteed pay, but consider what you get in return: an ongoing partnership with an experienced professional driver who’s helping you grow your business.
Be Flexible
For some drivers, the money might be less important than the nature of the work. Ask drivers if they have preferred lanes. If they do, try to accommodate those preferences. Drivers may also have preferences about when they work, so if possible, match your night owls and “morning people” with the right loads.
Trust Your Drivers
Drivers don’t want dispatchers checking in on them every 20 minutes. Give contract drivers access to PCS Mobile TMS, and tell them that because the app tracks their location, they won’t have to offer any status reports.
Scale Up With PCS TMS for Carriers
Manual processes and spreadsheets get in the way of fleet growth. PCS TMS for Carriers lets you digitize documents, automate settlements, and improve operational efficiency.
PCS customers have grown from small family businesses to enterprise fleets using our software. If you’re ready to get paid faster, retain your best drivers, and scale up, it’s time to try PCS.
