One critical but often overlooked component of successful shipping and logistics management remains freight audit and payment processes. Knowing when invoices get paid, which currently await payment, and tracking payment delays and issues are essential for budget management and financial stability. Following a few recommended best practices makes managing shipping costs easier. So shippers should start by following these seven best practices today.
Create a Clear Strategy for Freight Audit and Payment
Having a clear and thought-out strategy for handling payments, invoicing, and budget planning is critical for maximizing profits. According to Logistics Management, logistics advisors need to stay smart with their freight audit and payment processes, from automating invoicing and payment options to intelligent financial backing decisions. Shippers should only use trusted, federally regulated banking institutions for payment of shipping invoices, not third-party, unregulated payment options. For instance, these unregulated entities cannot protect your brand from misappropriation of funds, or they may subject your business to additional delays in payments too. Working with a bank to handle all physical payments eliminates that concern and builds rapport within the network.
Communicate in Real-Time With Network Partners
Communication represents another critical part of shipping and logistics management where auditing and payment management can be improved. Overseeing carriers, maintaining accountability, and adhering to budget constraints depend on fast and accurate communications. Real-time conversations and data-sharing ensure all network partners stay on the same page. That creates a collaborative approach to work with carriers and vendors to manage exceptions, overcharges or other issues before payments are made.
Standardize Data to Compare Apples to Apples
For efficient freight audit and payment processes, carrier scorecards are another of the top helpful digital tools. Outlining the pros and cons and documenting past experiences and thoughts during interactions with vendors allows for quick and easy reference. Having the same set of data points and information to reference helps ensure fair and precise comparisons. This remains imperative for accurate decision-making when choosing and working with carriers. And that process continues when shippers start working with those parties to process claims following a freight audit and payment.
Automate Report Generation and Distribution
Freight audit and payment protocols can benefit significantly from automation. Modern tools, such as digital dashboards, online platforms, automated processes, and shipping technology, can make it easier to plan finances and adhere to analytical predictions. Improving communications and reporting procedures between supply chain managers and third-party partners allows for more accurate reporting and data distribution.
Choose a Partner With Dedicated Account Management Services
Managing payment processes can become a challenge even for the most prepared and informed managers. Working with carriers and vendors within a single dedicated management system and platform exemplifies a practical way to ensure freight audits and payments occur efficiently. Having staff, platforms, and resources dedicated to account management means other tasks can get the attention they need when issues arise.
Develop Shipment Optimization Strategies Based on Market Trends
Careful monitoring of current budgeting controls and robust financial audits and invoice payments are more streamlined and accessible when users have a single source of truth to reference. Data collection and analytics can shed light on past trends and highlight potential issues or problems with payment collections. Furthermore, that same information is valuable for optimizing freight routes and more. After all, optimizing shipments and carrier relationships can help supply chain managers improve relations with carriers and vendors.
For example, consider using parcel, hub injection, or other services, but the increased volume or complexity will increase the risk of errors in invoices. Regardless, it’s all about getting the right quality, service and value from the network. And successful, outsourced auditing services can ensure parcel transportation costs are accurate and within reason.
Continuously Assess Costs to See When to Scale the Network
The final example of payment best practices for managers today remains diversifying their focus and market reach. When a setup seems to work, it still needs careful monitoring because things can change instantly. Ensuring adaptability and knowing when to scale up or scale down the network can maximize profits and keep expenses low. And that decision must be based on the continuous assessment of invoicing accuracy, freight costs and more.
Gain Control Over Your Shipping Budget by Tapping the Value of Intelligent Audit
Change is inevitable, and stagnancy, even in times of growth and profit, is not tolerable when it comes to monitoring and adapting freight audit and payment practices. Unfortunately, many supply chain administrators still lack the insight, tools, resources, and experience to control their shipping budget. The freight audit and payment services available from Intelligent Audit can make a world of difference. Contact Intelligent Audit to get started.