The answer? Investing in the right invoice management software. But with so many options in the market, how do you validate if a potential partner will actually serve your supply chain’s needs?
7 requirements for a freight invoice management solution
A technology-powered workflow exceeds the capabilities of even high-performing transportation and accounts payable (AP) teams in terms of speed, accuracy, and data insights.
A modern freight audit and pay (FA&P) platform ingests contract terms, rate tables, discounts, invoices, receipts, and more. It also automates key workflows that are time-consuming, tedious, and error-prone. As a result, it streamlines the freight invoice process with little to no human touch while improving profitability.
In order to unlock more profit with your solution, these 7 features are critical.
1. Document digitization and centralization
You need easy access to key documentation to validate charges and easily share with customers if you’re a 3PL. Some software runs on OCR to extract a few data points off a document. Logistics-AI uses multiple models to extract all vital information from any format and stores it in one system.
This gives you complete context on every shipment to properly manage its financials and use that data for further analysis.
2. Shipment and carrier data normalization
Having centralized data isn’t useful if it’s full of duplicates, disorganized, or inconsistent. Technology that is effective for supply chain must be able to contextualize and standardize data. Each carrier has different standards, structures, and naming on their invoices, just think of all the ways linehaul or fuel surcharge can be written.
If you want to assess your costs across your network, like accessorials, service levels, lanes, etc., you need standardized data to analyze costs holistically.
3. Automated audit process
Humans manually auditing invoices is error prone and time consuming which leads to overpayments (sometimes as much as 15%) and financial inefficiencies. Hands down, the most accurate and efficient way to run freight audits is with software.
But great software does more than find discrepancies. Great software helps you identify why the problem occurred so you can address it and decrease issues over time.
4. Clear issue explainability
Speaking of how you resolve and prevent errors, issue explainability is a must. The tool you choose should come with clear explainability so you can expedite resolution and stop overpaying.
Plus, tracking features ensure that credits from error resolutions are correctly applied to carrier invoices.
5. Established payment workflows
Old school checks are riddled with risk. But software like Loop allows you to pay automatically or with a click of a button. That’s how Great Dane audits and pays 98% of its invoices with no touch. Software can easily settle carrier invoices with different payment preferences and terms. This speed and accuracy builds great carrier relationships and lets you hold on to more working capital.
The bonus? You can unlock quick pay discounts and create alternate revenue streams to maximize profits.
6. In-depth spend analysis
Your centralized data repository provides visibility into all your freight expenses. This means you can look at high level spend or drill down into shipment or product level costs.
With a solution that prioritizes flexibility, you can look for anomalies and run scenarios to find opportunities to improve your transportation spend.You could even take it a step further and use that data to highlight areas of opportunity to reduce your overall cost to serve.
7. Carrier contract recommendations
After implementing the above best practices, you’ll be able to benchmark carrier or 3PL performance. So you can drill down and understand if you have the right contract terms. How often are you hitting your package minimums? Do you have the appropriate discounts on your most costly accessorials?
Your solution should provide recommendations on where you can improve your contracts to better meet your needs.
Both will give you the knowledge (i.e. leverage) you need to successfully renegotiate contracts and discounts.
Cut costs with better freight invoice management on Loop
For modern businesses with increasing shipment volume and complexity, technology is the only way to successfully scale invoice management.
Loop’s AI is uniquely built to extract high-quality data and accurately automate workflows. With Loop, you can harness a wealth of data to maximize profitability.
Contact Loop today to get more efficient and profitable freight invoice management.
