Auto dealerships often hire transport companies 50 times each month to move vehicles to or from auctions, other dealers and consumers.

In most cases, that means they’re writing 50 paper checks a month, each of which must be written, mailed and later reconciled. Autosled, a digital platform that connects dealerships and transporters, reported that 90% of the B2B payments it receives from dealers arrive as checks.

Autosled encourages dealerships to transition from checks to automated clearing house (ACH) transfers or credit cards.

“It’s efficient, it’s timely, it’s quick — they’re not having to cut the manual checks and all those different things,” Dan Sperau, chief financial officer and president at Autosled, told PYMNTS.

Boosting Efficiency

To get the word out to dealerships about the efficiencies that are available to them, the company recently posted on social media an infographic outlining “6 Check Cutting Myths for Car Dealerships.”

When onboarding dealerships to the platform, Autosled representatives talk with them about the efficiencies it can offer around not only transporting vehicles but also helping with the back-office processes. This includes not only payments but also handling the tax documents needed for each independent contractor and each move of a vehicle.

“I came from the finance side in the dealership world, and the stress of collecting W-9s, collecting the things you need to get checks, the approvals, then at the end of the year the mad rush of the 1099s and you have 30 days to put it together becomes a massive headache,” Sperau said. “So, the more efficient you can become in doing things digitally — because the digital platform you use collects all that data, so it really is just the push of a button.”

The company has converted some dealers to some form of digital payment. One key is talking with the people who make those kinds of decisions at the dealership — the controllers and chief financial officers — and explaining the benefits, Sperau said.

“We have a dealer group who’s done it since Day One,” Sperau said. “Their controller loves it because it’s easy for her to reconcile — she does it on a month-to-month basis with their bank statements as opposed to day-to-day trying to make sure it’s all in there.”

Better Vendor Relationships

These issues led to the creation of Autosled. Dave Sperau, founder and chief revenue officer at Autosled, worked as a general manager at car dealerships and had to hire someone to handle the payments and paperwork for the 60 or 70 vehicles that were moved each month — each of which required four different pieces of paper to get a check cut for the transporter.

Read also: Use of Digital Payments Drives Capacity, Efficiency in Vehicle Transport Biz

The Autosled platform aims to simplify the process, letting dealers make a single payment each month to one vendor that would arrange the transportation and pay all the vendors — in most cases, removing the hassle of cutting checks from the process entirely.

“We’re cutting very few checks — I mean, a handful,” Dave Sperau told PYMNTS. “So, we’re getting money the old-fashioned way, but we’re sending it out via ACH.”

Fast payments also improve relationships with the transporters, which are generally mom-and-pop companies with an average of two trucks and trailers. With the ACH used by Autosled, they receive the payment direct deposited within two days into their checking accounts. Traditionally, when paid by a dealership using checks, the transport companies would wait an average of 30 days.

“We have 5,500 or 6,000 transport companies on the platform now, and 99% of them have their bank account information in the system, and that’s how we pay,” Dave Sperau said. “We don’t want to write any more checks — it’s inefficient, and they need the money. They need the working capital, and they need it as quick as possible.”

Freeing up Staff From Paperwork

The need for vehicle transport has increased over the last four or five years as the rise of digital auctions has led to dealers buying vehicles one at a time from many sources rather than several vehicles at a time from a single seller.

“It’s just created a lot more transactions for the same number of vehicles being purchased and moved,” Sperau said. “The growth of digital auctions has been incredible for the dealers, but it’s created more transactions.”

In many cases, automotive dealerships are using ACH or credit cards to pay for other things such as software subscriptions, so it’s just a matter of showing them that they can do the same with the vendors who transport vehicles for them.

“The biggest dealership group we have repositioned the person that was handling transportation to one of their internet departments because that person didn’t need to get all those checks cut and keep track of all that paperwork — bill of lading, insurance verification, W9,” Sperau said. “I think that kind of sums it up — I mean, that person is now doing something else in one of the other departments.”

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