Freight Broker Software Blog

Now that you have the "tax season blues", it is time to prepare your tax return and pay the piper (the IRS). Most companies use a paid tax return preparer to prepare and file taxes. In 2009 the IRS conducted a review and estimated there are between 900,000 and 1.2 million paid tax return preparers in the US. How can you tell if you have an honest preparer and why does it matter?

If you go the IRS webpage and search for "tax preparer fraud", you will find over 350 IRS documents dealing with tax preparer fraud. Many of them report fines and jail sentences imposed on fraudulent tax preparers and tax payers who trusted these fraudulent preparers. The IRS is serious about tax fraud and is cracking down on third party tax preparers. If the IRS suspects a preparer of fraudulent activities, they will audit all of the preparer's clients. In addition to the hassle of an audit, if the IRS finds any inconsistencies in your returns, you are facing fines, penalties and additional taxes. It is imperative that you select your preparer carefully.

This has become such a large problem, the IRS has proposed that starting next year all preparers that do not hold a professional designation, will need to be registered with the IRS. Preparers would need to register with the IRS, pass a competency exam, and complete 15 hours annually of continuing education classes. They would also need to comply with the IRS Ethical Standards to continue to be registered as a paid tax preparer.

When selecting a preparer, be suspicious of anyone that claims they can obtain a larger refund than others or those who base their fees on a percentage of the refund. Look around for a tax professional that is established and will be there in the future to help you resolve any issues. The last thing you need to add to the tax season blues is to be audited because you used a fly by night preparer.

If you have a good brokerage software system, like TruckMaster's Freight Brokerage Solution, preparing your taxes is much simpler. You can print out an income statement and trial balance from the accounting system which will make preparing your tax return fast and accurate. Then you can easily check your preparer's figures against your actual income and expenses in the general ledger.

It may be too late this year to streamline your tax preparation procedures, but act now to make next year less painful and time consuming.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

For most of us, most of the time, the holidays at the end of the year are a season of good cheer, family, and hopeful dreams for the New Year. I am always bothered by the fact that the next thing you are slapped with is taxes. Couldn't they find a better time to assess taxes? Perhaps May, or June, by that time your year is either going well enough that you can stomach the tax challenge, or it is looking so bad you have worked up bad mood that matches the thrill of filing taxes. Sadly, the reality is we have to attack them head on, or face the consequences – fines.

While doing the research for this blog article, I was more than a little surprised by the severity of the fines imposed for things like 1099's. Not just for filing them late, but also for adjustments. Therefore, not only do you have to be on time, you must be accurate or face fines. The fines are not exactly cheap. If you make corrections within 30 days, it is $15 per 1099. Between April 1 and August 1, that goes up to $30 per 1099, and after August 1, it is $50 per 1099! Depending on the size of your brokerage, and the number of carriers you deal with on an annual basis, this could get to be quite an expense.

Taxes are certainly another instance when having a reliable, complete, and integrated brokerage system can save you time and money, and provide peace of mind. Whether you are trying to manage your business accounting manually or on spreadsheets, this type of itemization and report building is an enormous investment in time, and the result may be riddled with errors in data entry or incorrect calculations.

There are several stand-alone accounting solutions available which help, but for a freight brokerage, this means re-entering information into each separate module and risking data entry errors in each shipment's entries. TruckMaster's freight brokerage solution provides single entry, easy to follow data flow. You never have to enter the same data twice. Your 1099 forms are simply printed and ready to send. This means there is very little extra work at year-end, and no worries.

If you have found yourself stressed over filing tax forms this year, perhaps it is time to take a look at what TruckMaster's Freight Brokerage software can do for you.

More Info:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

http://www.ehow.com/about_4743118_reporting-requirements-small-business.html

http://www.mckenzielaw.com/INDEPEND.html

Kurtis Brown
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

Today many people in the transportation business believe that double-brokering and co-brokering mean the same thing. This, however, is not true. There is a difference between the two, and it is important for the industry to understand the difference, simply because one can be an asset to your company and the other a definite risk.

The question often arises regarding the legality of accepting a load from a customer and giving that load to another broker for assistance in arranging transportation. Yes, co-brokering is legal and it can be advantageous to have another broker help you cover a load, so long as your contract with the customer does not prohibit co-brokering. It can be beneficial in proving to your customer that your brokerage has resources available to fulfill all of their requests.

In a co-broker relationship, you are there to service a specific need of your customer. Both parties understanding each others functions and responsibilities you are able to use each others resources in order to serve your customer in a satisfactory way and also to make a profit on a transaction that you might have otherwise refused. After all, you're in business, to profit. If you don't serve your customer someone else will.

Double brokering on the other hand is a risky situation. In many cases double brokering loads does in no harm, other than reducing profit margins and slowing payments. It does become a real problem, however, when fraud is the intent from the beginning.

There are a lot of fraudulent beings out there. The most common one typically involves an imposter motor carrier who takes a load from a legitimate broker and then re-posts the load on the internet load board at an inflated rate to lure in an unsuspecting carrier to transport the freight. The imposter has no intention of ever paying this carrier they just wait for the evidence of a completed shipment from the true carrier, then the imposter submits its own invoice to the first broker, collects payment and disappears leaving the carrier who actually hauled this load high and dry.

There are ways to protect yourself:

1. Make sure the phone and fax numbers match their authority.
2. Make sure insurance certificates come only from the issuing Insurance Company.
3. Dispatch the trucks yourself, talk to the driver and get as much information from them as possible.
4. If you have a relationship with your shipper, ask them to verify the name on the truck.
5. Don't give advances.
6. Caller ID. It’s a good way to double check the information they are telling you.
7. Check the FMCSA safety record, safety rating, inspections, and anything else that will help you confirm they are who they say they are.
8. Ask for references and check them out. It may save you a lot of time and money.
9. If you have a contract prohibiting the substitution of carriers and/or double brokering without the broker's written permission, be sure you do the follow up. Make sure the carrier did as they said they would do.
10. There are many carriers who also hold a broker's license under the same name. Make sure they are hauling loads on their own trucks and not brokering them out.

There are lots of fraudulent people in the world today. You need to protect your company and your customer. Be sure who you are dealing with and make sure you have all of their credentials so that you are not inviting financial disaster.

Using TruckMaster's Freight Brokerage Software will help you manage your business and keep track of the things that make a world of difference to your business. Contact us today for a free demo.

Donna Bratton
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

If the recent $23 million jury verdict against CH Robinson, for a fatal accident by one of their carriers, is not overturned on appeal, your responsibility to ensure that you are brokering only to "safe" carriers is much more important than a year ago. If brokers and 3PLs can be held liable for unsafe actions of carriers and their drivers, it is incumbent upon every broker to practice "due diligence" in monitoring carrier safety ratings.

With the new FMCSA Safety Rating measurement system (CSA 2010), which could update carrier safety rating monthly, your "due diligence" practices regarding carrier safety will become more involved and your company’s safety procedures will need to be checked and updated soon.

Several states have already implemented the CSA2010 monitoring process, and by the middle of 2010 all states will be required to it. At that time, the Safer and SafeStat programs will be replaced by CSA 2010. Not only will the carrier be rated, but also the drivers. All violations and inspections will update the carrier and driver safety ratings monthly.

You need to start preparing your brokerage company for this new program. You will need to implement a regular carrier safety update procedure so that when you book a load on a carrier you can be certain that the carrier has a good safety rating on the new CSA 2010 webpage.

Failure to ensure you are brokering only to safe carriers could leave your company liable, just as CH Robinson was found liable. Even if the CH Robinson verdict is overturned on appeal, there have been other recent jury verdicts that ruled against brokers that do not practice "due diligence" in selecting their carriers. "Schramm versus Foster" is one example of a "due diligence" court case involving brokers and 3PLs.

Do your homework. Update your safety procedures. Do not leave yourself open for potential, company destroying, lawsuits.

A good brokerage software package can make monitoring your carrier safety and insurance files much easier. If you do not have software or are not satisfied with your current software, contact us today for a free demo of TruckMaster Freight Brokerage Software.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

Choosing freight brokerage software can be a daunting task. There are many packages out there, many with varying feature sets and price ranges. You can spend anywhere from $200 to well over $20,000 for a system. What are the core features that you need to keep in mind while sifting through the offerings?

Here are a few thoughts:

Accessibility

Your freight brokerage software should be server based, your agents should be able to access it via the internet from their home or office computers. Stay away from "solutions" where each of your remote locations has its own server, and a "dump" has to be completed at an interval to sync the data.

See if the software provider has an ASP or co-hosting option. ASP typically encompasses a setup charge, then a low monthly fee, rather than a software purchase. Co-hosting is where they host the server you purchase for you for a monthly fee. This eliminates the need to maintain the server, or have a high bandwidth internet connection.

Carriers should have a secure web site that they access to view loads you have available, request them, enter equipment statuses, submit load documentation, invoice you for loads they’ve delivered, and the like.

Likewise your customers should have a secure web site that they can access to tender you loads and view equipment / load statuses.

Connectivity

Your freight broker software should have full EDI send and receive capability, meaning at minimum transaction sets 204 (Load Tender), 990 (Response to Load Tender), 214 (Carrier Shipment Status), and 210 (Carrier Freight Invoice). It should not require you to utilize a VAN (Value Added Network, who charges a transaction fee), but allow FTP or emailed transactions.

Not only should you be able to accept loads from your customers via EDI, you should also be able to tender loads to your carriers. Careful on this one – many software packages are only able to receive 204s, not tender them.

Ease Of Use

The truck brokerage software should be intuitive enough that new agents you bring on need limited training before they can start producing revenue for you. This is an often overlooked part of the software search, but is probably one of the most important. Make sure there’s a decent manual available (preferably integrated into the software itself), and contact references to make sure that customer support provided is prompt and knowledgeable.

Flexibility

Your truck broker software should have an upgrade option available to track leased/owned assets. Who knows what the future holds, and having to scrap your existing system to bring on a couple leasers is an expensive adjustment.

Ensure the freight brokerage software is more than just a database. It should function as another group of employees, constantly and tirelessly monitoring load statuses, carrier qualifications, and other criteria your agents should not have to do themselves.

Stability

Ensure the freight brokerage system is available 24/7, check the company’s references to verify any claims the software provider makes to this effect.

Make sure the company has been around for awhile. I couldn’t count on both hands the number of companies we have dealt with that have entered and exited the market in the span of a year or two.

In short, a little more homework prior to the purchase will pay off in spades in the long run. Check out TruckMaster's Freight Brokerage Software for all of the above, and of course much more.

Greg Dodson
TruckMaster Solution Provider
TruckMaster Logistics Systems, Inc.
TruckMaster Your Freight Brokerage™