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The recent pandemic emphasized the importance of agility and interconnectedness amongst global supply chains. While technology has transformed business over the past two decades, the way freight invoicing is managed is still lagging for many finance teams. During the pandemic, finance teams who manage freight expenses focused primarily on minimizing costs and prioritizing vendor payments to avoid credit holds and disruption.
As we emerge from the pandemic and implement newfound learnings, finance teams are looking towards the future and leveraging innovation to better control and predict their freight costs.
Here Are 3 Ways Accounting Teams Can Leverage Tech to Manage Freight Costs:
Stop Paying Invoicing Errors
Companies are regularly losing out on freight shipments due to invoicing errors and overcharges. There are many reasons for these errors, but the most common issues result from human oversight and fees. Many accounts payable teams responsible for manually auditing freight invoices do not have the resources to identify inconsistencies or manage disputes.
With proper invoice auditing technology, AP teams often pay invoicing errors simply because they need to maintain the continuity of their supply chain. Disputes for payments made on incorrect amounts can be lengthy, taking months, in some cases, even years to resolve. Wasted spending and lack of spend visibility are damaging to a company’s ability to control cash flow and scale its operations.
By leveraging real-time forensic-level freight audit technology, AP teams can better manage freight invoice auditing and catch invoice errors before they pay. Teams can audit thousands of documents for errors in minutes and have instant notifications when there is a billing discrepancy. Instantaneous error identification allows the AP team to dispute issues with vendors immediately and find quick solutions. By proactively eliminating wasted spending, AP teams can benefit from the ability to confidently audit and approve invoices at scale.
Ensure Contractual Compliance
Billing transparency is critical to managing and forecasting freight costs. While a real-time freight audit generates savings by eliminating the risk of wasted spending, it also ensures that the invoices you receive are contractually compliant with the agreements you have in place with your vendor.
The average AP team member does not have time to compare every invoice received to its related contract. Freight contracts can be incredibly complex, especially for finance team members who may not be versed in logistics. Freight invoices are often supported by a myriad of supporting documents and transaction records. The most successful and efficient AP teams are leveraging freight audit technology to compare freight invoices against their supporting documents.
By implementing a best-in-class freight audit solution, AP teams can ensure that all invoices paid are exactly as defined by their vendor contracts. When all freight invoices are processed through a centralized system, insights can be generated from your company’s invoicing data. AP team members can track provider billing over time to determine which providers have the most accurate billing processes and which may not be providing the best service. Using supplier performance insights, finance teams can better negotiate terms during times of contract renewals.
Leverage Early Payment Discounts
Early payment discounts, also known as prompt payment discounts, allow you to earn a discount on invoices when you pay outstanding balances before the due date. While receiving a cash discount is motivation to participate in making earlier payments, it also sets a positive rapport with vendors that creates possibilities for favorable rates and future partnerships.
A common challenge AP teams encounter is having to use two or more error-prone entry systems, which can delay invoice auditing and approval, thus delaying payments. To participate in early payment discounts, accounts payable teams need a centralized processing system to enhance the efficiency of their payments processes. Advanced freight auditing solutions allow finance leaders and teams to expedite their invoice turnaround times to capture early payment discounts. The ultimate goal for AP teams who manage freight should be to ensure every invoice is matched before payment is made. This method reduces risk and generates immediate cash flow for the company.
OpenEnvoy is the first and only freight audit solution that supports detention and demurrage audit compliance for shipping lines and shippers. With our freight audit solution, AP teams eliminate wasted spending and maintain pristine records with a complete forensic audit in any currency, language, or vendor across all industries in hours.
To learn more how OpenEnvoy’s freight audit solution can start saving you time and money, schedule a demo with an expert today by visiting https://openenvoy.com/contact-us/.
