How to pay a dispatcher when factoring your loads

Who pays whom

Tick the box to switch between the default path and the optional factor-direct branch.

The broker never pays the dispatcher in either path. That matters: a dispatcher paid by brokers on your loads has a conflict of interest. The only question factoring raises is whether the dispatcher's fee leaves your account or your factor's.

How the NOA changes the money

Before you factor, a broker pays you, and you pay everyone else from that. After you factor, the notice of assignment tells every broker to pay the factor. The factor advances you most of the invoice right away, minus its fee and any reserve, and collects from the broker later. Your dispatcher hasn't changed and the fee hasn't changed; only the route the load money takes has.

The options, with pros and cons

Option 1: You pay the dispatcher yourself

You receive the factor's advance, then pay the dispatcher's weekly invoice from your business account.

• Pros: Simple, works with any factor, and you see every dollar before it goes out. Nothing to authorize or cancel.
• Cons: You have to remember to pay, and you need cash in the account when the invoice comes.

Option 2: Your factor pays the dispatcher, with your authorization

Some factors offer to send a set amount or percentage of each advance to a third party you name, such as a dispatcher, after you sign an authorization.

• Pros: Automatic; the fee is paid as the money comes in, and your advance arrives already net of it.
• Cons: Not every factor offers it; some may charge for it; you must keep the authorization accurate and know how to revoke it. Read the factor's terms.

Questions to ask your factor before authorizing

1. Do you offer third-party payments to a dispatcher, and is there a charge?
2. Is the payment a fixed amount, a percentage of each advance, or per invoice?
3. When is it paid: with each advance, weekly, or monthly?
4. What does the authorization form allow, and how do I change or cancel it?
5. Will my statements show each dispatch payment, so I can match it to the dispatcher's invoice?

What to avoid

• The dispatcher taking your load money. If a dispatcher asks brokers to pay the dispatcher, or asks to be the payee on your factoring account, stop. Load money goes to you or your factor.
• Paying before loads move. Factoring doesn't change that rule: a fee before the first load is a red flag.

How we invoice

We invoice weekly, for loads delivered that week, listing each load with its gross and the fee. The fee is 5% of gross for one truck with authority older than six months (7% for a new MC, a 26 ft box truck or a hotshot, 4% per truck for fleets), and it is the same whether you factor or not. Pay it from your account, or through your factor if your factor offers third-party payments and you authorize it; either works for us. The full fee details are on our dispatch fees page.

If you switch factors

Changing factoring companies changes the payee on every broker's file. The new factor sends new notices of assignment, and the old factor sends releases once open invoices are settled. During the switch, double-check where each invoice is being paid, and update any third-party payment authorization so your dispatcher's fee isn't sent from the wrong account or twice.

Keeping the books straight

With factoring and a dispatcher, one load creates three records: the broker's payment to the factor, the factor's advance and fee to you, and the dispatcher's invoice. Match all three to the rate confirmation every week. The factoring statement shows what each load really paid; the dispatch invoice shows the fee on that same gross. When the numbers agree, your books are right; when they don't, you catch it in days instead of at tax time.

General information, not tax advice. Rules and rates change every year and depend on your situation: confirm with a tax professional before you file. We are not a tax preparer or accountant.