E-Invoicing Solutions for Logistics Providers
Solutions to help Transport Carriers, Freight Forwarders, 3PLs and NVOCCs improve e-invoicing and payment processing
A fully automated solution with capability of generating concise e-invoices and payment distribution. This article focuses specifically on invoices generated by transport carriers, freight forwarders, 3PLs and NVOCCs.
Though the invoicing problem varies from mode to mode, freight invoices have a long-standing reputation for being inaccurate and inconsistent. As a general rule, billing errors increase as service or price complexity goes up. Conversely, errors tend to drop as IT sophistication increases. Therefore, it is not surprising that ocean freight invoices present a much greater improvement opportunity than air invoices. While ocean carriers are working hard to achieve IT parity with other modes, their penchant for introducing new surcharges with dynamic effective dates and situational applicability ensures that billing will be more art than science into the foreseeable future.
On the balance sheet side of the equation, the problem is cash flow. When a shipper overpays an invoice and only catches the error via post audit, there is a negative cash hit on the balance sheet. The overpay and charge back process increases accounts payable and the logistics provider gets nothing in return for the cost of the money and claim handling.
Typical Invoicing Issues
The goal of audit and payment is to reconcile the service/price agreed to in contract rate agreement procurement process with the service/price presented on the invoice. This is challenging even when the service procured matches the service invoiced. When the services vary, the difficulty multiplies.
But before digging into the specifics of an invoicing error, the error must be caught or flagged in the first place. An automated system is required to cost effectively catch these problems in a pre-audit environment. The e-invocing solution must be able to check for duplicates as well as wrong charges. The duplicates can be tricky, especially in international commerce governed by INCO-Terms. The same charge is sometimes presented to both the origin and the destination party. Simply looking for duplicate invoice numbers will not catch these instances.
Service performance can also be difficult to verify. For example, if a charge is contingent upon meeting a specific transit time, the e-invoiving solution must be able to check actual transit time before dispositioning the invoice.
As daunting as the above sounds, a properly designed e-invoicing solution can perform effective pre-audits of freight invoices. But in order to do so, it must have some specific capabilities, for example:
Integration with a comprehensive and reliable rate management data-base against which to audit, as well as the rating and routing logic to properly rate the invoice according to the INCO-Terms and rules that were in place at the time of shipment.
- Facility to receive and open electronic invoices, as well as map them properly to the charge categories in the rate and surcharge database.
- Smart logic to flag duplicate invoices with different invoice numbers by comparing multiple parameters in combination — e.g. ship date, invoice amount, origin/destination, commodity, etc.
- Integration with a shipment tracking and tracing system (or systems) in order to verify service performance.
- Flexible business rules that can process the same type of error in different ways according to the specific agreement in place with each carrier.
- On-line work flow functionality to ease approval of new charges and management of exceptions.
In order to reap the expected benefits, it is imperative to pre-audit freight invoices — particularly for ocean shipments. An e-invoicing solution with the proper integration and back-end functionality can perform this task admirably — protecting both profitability and cash flow.
- Reduce data entry and manual look ups through integration with Tariff-Trek! and web service enabled communication with external systems.
- Reduce document storage and archive retrieval coast with the DME and electronic archiving.
- Increase billing accuracy to your customers by ensuring your underlying freight invoices are accurate.
- Dynamic Rules Engine – ensures invoices are rated based on the rates, surcharges, accessorials and other charges that applied at the time of shipment origination.
- Duplicate Invoice Logic – Identifies virtually all duplicate invoices based on a variety of business rules, events and parameter combinations.
- Data Integration and EDI – Can receive electronic invoices and communicate with customer accounting systems via any means available in the market today – including standard EDI, flat files, XML and SOAP.
- Data Uploader – Streamlines paper invoice processing.
- Payment Processing – Provides summary and detail information on invoices.
- Exception Management Interface – Provides a clearing house for customers to view and disposition invoices that require intervention.
- Approval Work Flow – Part of the Exception Management process, enables authorized personnel to quickly approve/reject charges that are not in the rate database.
The Freightgate Team excels at finding innovative solutions for to improve E-Invoicing and Freight Invoice Auditing with our vast arsenal of flexible cloud technology tools – take a logistics cloud demo and experience the difference yourself first hand. Share with us your toughest E-Invoicing challenge and allow us to come up with a creative, potentially out of the box solution.5>