Inefficiencies in Accounts Payable operations can be as elusive and daunting as mythical monsters. Just when you think everything's running smoothly, AP monsters rise, threatening your back-office efficiency.
These silent disruptors lurk behind the scenes, mucking up your process and cash flow.
If your office is stuck in a productivity lull, you might be suffering from three big AP Monsters that cripple operations:
But fear not! Denim’s proprietary freight payment-ectomobile is here to help conquer back-office demons, ghouls, and productivity-sucking beasts from your brokerage in no time.
This phantom from a bygone era haunts many a freight office, whispering tales of "how things used to be," and causing present-day systems to revert to slow, manual operations. These arduous, outdated processes can set back even the best office.
Your brokerage might be possessed by this process-loving phantom if you hear things like “I’ve always done it that way”, or “I prefer doing it manually” when trying to improve your freight billing systems with new software or automation.
Take heed for there is a solution dear reader, and your brokerage needn’t be held back by these ghosts. Denim’s Freight Payment System removes all need for manual input on tasks such as sending payments, duplicate data entry, or updating carriers on payment status.
With the Denim back office, you can reduce manual time spent on previously burdensome tasks by 75%, all while improving the accuracy and timeliness of payments and document collection.
Begone, dark phantom! You have no hold here!
If your office seems like it’s constantly struggling with collecting, organizing, and assigning the correct documents for shipments, you might be a victim of the ScaterSphinx.
The ScatterSphinx reigns over the Paper Labyrinth of cluttered filing cabinets, poorly categorized email threads, and misplaced or misfiled documents throughout the back office. This beast rears its ugly head far too often in the world of accounts payable, when rate confirmations are often approved in email threads and documents sent by text message.
If it seems like every time you’re looking for a rate confirmation or proof of delivery you have to run through a labyrinth of paper or answer riddles in your search bar to find what you’re looking for, it might be time for a change.
Luckily, that’s exactly where Denim’s Document Inbox and Collection excels. You’ll be able to almost instantly streamline document collection and management using Denim’s inbox to request and receive contractor documents in a single centralized location. This keeps you out of the endless labyrinth of email threads and folder trees that bog down your processes.
Denim’s back-office document management system completely eliminates the need for long email chains and follow-up calls. You’ll also be able to quickly and easily onboard carriers with a password-free and app-free document upload portal, and eliminate redundant data entry with automated document attachments.
ScatterSphinx, consider yourself vanquished!
Manually reviewing carrier invoices against rate confirmations is a cumbersome, inefficient, and error-prone process. Audits like these often leave Accounts Payable checking and double-checking every detail, forcing even the best operations to move at a snail’s pace.
If the task of manually reviewing freight invoice audits is turning your team to stone, then the Manual Audit Medusa is likely the culprit. Her mane, a daunting entanglement of freight invoices and writhing snakes, ensnares employees who dare to dive deep into it to match invoices to rate confirmations. Those brave enough to venture become paralyzed, overwhelmed by the staggering complexity of the audit tasks they face.
Behold however the Perseus of audits, Denim Audit. This AI-powered document auditing system ensures job accuracy, identifies even the smallest of discrepancies, and streamlines document management in one easy-to-use system.
Documents like proof of delivery, carrier invoices, and rate confirmations are scanned and uploaded within seconds, flagging inconsistencies and matching fields between invoices and rate confirmations automatically.
It’s time to say goodbye to manual double-checking between your documentation and job details. Cut down on human error with AI-powered automatic document auditing, and get paid faster by submitting jobs correctly the first time.
With Denim Audit, you can consider your Manual Audit Medusa officially quashed!
Are you ready to streamline your operation and finally be rid of these meddling monsters that limit the potential and productivity of your office? Speak with one of our demon-slaying experts here to find out more about how Denim can help automate, streamline, and systemize your back-office in no time.
Thus these three monsters of AP have been banished, never to plague your office again!
.jpg)
Every market challenge is an invitation to innovate and redefine success.
Change-makers in the logistics world often defy the odds and break the mold. The SmartBroker of the Year Award stands as a testament to this spirit.
The SmartBroker emerges as the next generation of freight brokers in today's evolving logistics landscape. Unlike traditional counterparts, a SmartBroker seamlessly merges the art of relationship-building with the power of cutting-edge technology.
At its essence, a SmartBroker is characterized by:
While technology plays a pivotal role in their operations, their dedication to building lasting partnerships with shippers and carriers sets them apart. In a world where the balance between human interaction and digital proficiency is crucial, SmartBrokers redefines the future of freight brokering by offering an unmatched blend of technological innovation and human-centric operations.
Take, for instance, our 2022 award recipient, Dale Prax, the founder of Direct Expedite. With 30 years of industry experience, Dale brought innovation to ground-expedited transportation, hitting a remarkable milestone with their Automated Freight Quoting System. Today, Dale is developing technology and communities to fight double brokers with FreightValidate.com.
Nominations for the 2023 SmartBroker of the Year award are open. Whether you know a freight broker who fits the bill or believe you've got what it takes, we invite you to participate. Everyone is eligible to nominate—no need to be a Denim customer.
Here's what the selection process looks like:
The Smart Broker of the Year winner will receive a slick trophy, press release, and social media recognition.
Celebrating excellence in logistics propels the industry forward. Take advantage of this chance to highlight the distinction. Whether nominating an industry peer, a mentor, or yourself, be part of this esteemed recognition. Dive in and nominate now!
.jpg)
Leading a freight and logistics company is risky. Unexpected challenges surface that can be catastrophic. The recent closure of Meadow Lark and Convoy, after 40 years of reliable service, serves as a reminder.
A complex and interrelated economy like ours means the stability of our business partners & stakeholders, especially freight brokerages, can have a ripple effect on our own success. If you're working with a brokerage that suddenly ceases operations, what's the path forward?
Is there a way to safeguard your dues in such situations? Let’s explore this further.
Keeping a close eye on your cash flow is a no-brainer, but fleets often overlook the need to evaluate risk in their business partners
In a tight market, the last thing you’d want is to be caught unaware when the brokerage or shipper that owes you for last week’s loads files for bankruptcy. Abrupt closures cost you business time and resources.
To avoid surprises, keep these things in mind:
So what if it’s too late and your partner closes down but owes you money? Don't panic. There's a roadmap to recover your dues even after a partner's bankruptcy.
1. File a Claim Against the Broker Bond ASAP.
Freight brokers must have a broker bond (often referred to as a BMC-84) to operate legally. This bond is in place to ensure brokers fulfill their financial obligations to carriers and shippers.
If a broker defaults or goes bankrupt, carriers can file a claim against this bond to recover their dues.
Unfortunately, filing a claim doesn't always guarantee a full payout. The total amount might not cover all claims because there might be multiple claims against the same bond.
2. Reach Out to Shippers Directly.
Directly contacting the shipper is likely the fastest route to recover your dollars.
Look at any documentation you have on the load and see if you can find a direct point of contact at the shipper. If you find a contact, call them ASAP to explain your situation. Be prepared to show the Proof of Delivery, invoice, and rate confirmation.
If you don’t have a personal contact, call the main line and look for the billing department.
Shippers have a vested interest in maintaining operational continuity. They don't want disruptions, and paying carriers is part of that smooth flow.
3. Consider a Collections Agency.
Engaging a professional can sometimes expedite recovery. Collections agencies have the expertise and resources to pursue outstanding payments aggressively. They operate on a commission basis, typically earning a percentage of the collected amount.
If you're uncertain about which agency to work with, reach out for recommendations. Leveraging trusted industry contacts can point you to reputable agencies.
4. Hire a Lawyer and Take the Case to Court.
When the owed amount justifies the investment, legal recourse can be the necessary path. Sometimes, the only remaining option is the court. It's a route that demands time and money. However, with a solid case, carriers frequently find favorable outcomes.
Before pursuing collections and the court system, ensure the amount justifies your time and money investment. Bankruptcy proceedings can be complicated and prolonged. It's not a situation where a passive approach pays off.
Sometimes, it is more profitable to take the financial hit if you have a small amount outstanding. You could make up that cash by investing your time into new business instead of recovering old loads.
However, should you decide to pursue collections, swift action is crucial. The sooner you act, the better positioned you'll be to recover your funds. Remember, multiple creditors might be vying for the same limited pool of resources.
Staying on top of warning signs for all your customers and partners is tough. It requires time, due diligence, and regular communication. You may want to consider protecting your business with factoring.
Factoring is a financial solution where companies sell their invoices to a third party (a factor) at a discount. The factor advances the amount owed within days to use to pay for fuel, repairs, and grow your fleet. The factor then assumes the responsibility of collecting the invoice amount from the shipper or brokerage.
If you use a factoring company with a great credit and risk management team, they will act as your risk barometer. A great factoring company will proactively notify you if they think credit is deteriorating for a customer or broker.
Partnering with a factoring company, especially one like Denim, offers several benefits:
By effectively using factoring as a financial tool, businesses can maintain liquidity and gain a valuable partner in assessing and monitoring the financial health of their clients.
Schedule a Demo with Denim to learn how our best-in-class credit risk team can help protect your business from unpaid invoices.
Steve Hunt asked a good question about risk evaluation during our recent podcast episode with The Freight Coach. Whether you rely on a factoring company or take the self-financing route, having the right information is crucial for gauging financial risk.
When partnering with a factoring company, they spearhead gathering the necessary data. However, given that many shippers operate as privately held entities, obtaining comprehensive financial details isn't always straightforward. Many companies aren't extensively profiled on credit reporting platforms such as Experian or other online databases.
To thoroughly assess risk or collaborate effectively with your factoring company to determine a suitable credit line, it's imperative to directly engage with your customer to gather the following details:
1. Company and Contact Information:
2. Banking and Financial Data:
3. Trade References:
4. Legal Insights:
5. Key Financial Metrics and Documents:
This checklist is designed to help you seek detailed information from your shippers. While you might not get every piece of data you ask for, simply asking can provide more insights than if you didn't.
However, gathering this information is just the first step. It's crucial to cross-verify these data points with reputable credit bureaus such as Ansonia, Equifax, Experian, or Moody’s.
Having such detailed data at your fingertips allows you to make well-informed decisions regarding financial risks. It also provides your factoring partner with the insights needed to swiftly approve essential credit limits.
Operating in a landscape of financial intricacies demands vigilance and proactive planning. When business partners face financial troubles, it's vital for you to quickly identify red flags and be equipped with tactics to recover due amounts.
However, simply reacting to challenges isn't enough. Proactive financial solutions, like factoring, are pivotal in ensuring stability.
By utilizing such avenues, logistics companies can unlock immediate cash flow, eliminating the often prolonged wait and unpredictability of payments. Teaming up with a financial partner like Denim adds another layer of assurance. With features like ongoing credit monitoring and collections services, you are better equipped to weather the current freight market.
Disclaimer: The contents of this article should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult with counsel concerning your situation and specific legal questions.
.png)
Last quarter’s freight market trends are... confusing.
The Q3 Freight Market witnessed a combination of favorable and unfavorable trends, which even puzzled the industry analysts.
However, one thing is clear. The oversupplied market continues, and we still feel its consequences. So, let's take a closer look.
Consumers drive the economy, so their confidence and spending patterns are indicators for the freight market.
Consumer confidence declined for the past two months. Expectations for the next six months dropped below the recession threshold of 80, signaling less confidence about future business conditions, job availability, and incomes.
Consumers are generally concerned with rising prices, but for groceries and gasoline in particular. Price changes impacting consumers include:
Yet, despite these concerns, the broader economy remains surprisingly resilient. The American consumer is keeping the overall U.S. economy afloat for the time being with substantial spending on services such as concerts (i.e., the Eras Tour), travel, leisure, and various services.
Brokerages and fleets may consider expanding their business to include service-based industries, considering spending is still strong in this area.
The good news: August demand was relatively strong compared to the previous seven months. Progress is progress.
The jump in demand from July to August is relatively standard historically, thanks to the drop in productivity post-Fourth of July. Hot dogs > loads.
Long haul demand drove most of the increase, suggesting shippers replenished inventories downstream. Inventory bloat that plagued the industry earlier this year is dwindling.
The bad news: August demand was still lower than August 2022. And the increase was not significant enough to tighten capacity in the market and positively impact rates.
The DOE/EIA reported that diesel prices, although down $0.243 from a year ago, have been upward since July.
This trend has implications for carrier operations, particularly those in the spot market, without protection against these price hikes. Higher fuel costs inevitably squeeze carrier margins, potentially influencing freight rates and carriers' decisions about which loads to accept.
A key barometer for the freight sector is U.S. import demand. Ocean booking volumes are down over 35% since its peak on August 1st, indicating a significant slowdown in U.S. import demand.
While this shows a decrease in demand, ocean carriers are countering by using rejections to increase their utilization rates. This strategy may affect international freight rates and availability in the coming months.
Q3 presented a blend of challenges and opportunities for the freight sector. Consumer confidence saw a dip, yet the broader economy showcased surprising resilience.
August saw an uptick in demand, though not enough to tighten the saturated market. And the outlook for demand looks bleak, with the market leading indicator, ocean booking volumes, declining 35%.
The upcoming Q4 faces headwinds. Persistent inflation, massive debt, minimal savings rates, and student loans could keep us anchored at the bottom of the market going into 2024.
It's crucial to remember that the freight market is inherently cyclical. We've weathered market lows before. Now is the time to deepen carrier relationships, address operational gaps, and ramp up prospecting efforts. Brokerages that strategize and endure the upcoming quarter will come out stronger in 2024 and beyond.
.jpg)
Denim, the logistics industry’s trusted freight payment system, is excited to announce its integration with Logistically, an intuitive transportation management system (TMS) for 3PLs, brokers, and shippers. The strategic partnership streamlines back-office operations for freight brokerages, enabling employees to focus on revenue-generating tasks.
Integrating Denim with Logistically allows freight brokers to initiate payments and collections directly from their TMS dashboard. Once a load is delivered, the API sends the necessary documentation and details to create a job in Denim’s platform. The integration eliminates the need for duplicate data entry and seamlessly connects the load lifecycle from quote to payment.
"Freight professionals are passionate about logistics, not data entry. Their motivation lies in the intricacies of the industry, not tedious tasks. That’s why we’re thrilled to collaborate with Logistically and offer our mutual clients an integrated solution that eliminates tedious tasks," said Bharath Krishnamoorthy, CEO and co-founder of Denim. "Combining Denim's dependable freight payment system with Logistically's user-friendly TMS empowers freight brokers to optimize their operations, minimize errors, and enhance overall efficiency."
The integration between Denim and Logistically offers several key benefits to freight brokers:
"We are excited to collaborate with Denim and provide freight brokers with a comprehensive solution that combines the power of Logistically's TMS with Denim's trusted freight payment system," said Corey Coogan, President at Logistically. "Our integration aims to streamline operations, eliminate redundancies, and empower freight brokers to focus on delivering excellent service to their customers."
.jpg)
Leaders constantly balance two goals: building strong client relationships and keeping their business stable.
This balance gets tested when customers like Fortune 100 companies ask for longer payment terms.
The Fed's rate hikes this year have constricted financial liquidity for businesses. Many shippers rely on bank loans, so when the Fed rates increase, they grapple with higher bills, straining their budgets.
To handle these money pressures, shippers are thinking differently. Some propose longer payment terms, from the usual 30-day cycle to 60 or even 90 days. This shift can help their bottom line, making their financial reports look better or allowing them to make better offers to their clients.
For brokers, it's about tactful negotiation. They aim to keep clients happy and close. But they also need to watch their company's financial well-being. Striking the right balance is an essential skill.
Key Takeaways:
Extending payment to suppliers is a popular practice for companies to improve their working capital performance. When payment terms are 90 to 120-days, shippers are able to hold on to their cash longer and use as needed.
When you receive the dreaded email with the subject line "payment terms," your first instinct will be frustration. Take a deep breath and focus on understanding the payment situation.
Reasons for changing payment terms can vary from temporary cash flow hiccups to a permanent policy. First, jump on the phone and ask specific questions to understand the situation.
A few reasons why your clients may be asking for longer payment terms:
Extending payment terms helps your customer but has tangible repercussions for your business.
Waiting longer for payment significantly disrupts cash flow and strains business operations.
Additionally, longer payment terms can lead to increased administrative costs as the burden of tracking and managing delayed payments rises.
One of the more critical impacts of late payment or longer terms is the Days Sales Outstanding (DSO). This key metric indicates the average number of days it takes for a company to collect payment after a sale. Extended payment terms will increase DSO.
For freight brokers, a high DSO has specific ramifications:
By understanding the impacts of longer payment terms on your business, you are better equipped to find a solution with your customer.
Finding a mutually beneficial solution is vital to keeping the customer while protecting your business and financial goals.
The goal is to go into the conversation with 1-2 solutions, including your best-case scenario and a backup idea.
A few solutions to propose include:
1. Offer incentives for early payment
Encourage timely payments by making them appealing. According to a survey, 42% of leaders state that capturing early payment discounts is a priority. Offering discounts or priority services to clients who clear their bills promptly can be a significant motivator in today's economy.
2. Setting Up a Payment Plan
For clients daunted by immediate total payments, consider introducing structured payment plans. This solution breaks down the owed amount into more manageable installments.
3. Charge a fee for longer payment terms
An extended payment term impacts your DSO. If clients lean towards longer terms for various reasons, consider adjusting rates or charging a fee. Increasing your profit helps mitigate a longer DSO's financial ramifications and risks.
4. Negotiate for more business
An effective counter to prolonged payment durations can be negotiating for additional business. This strategy can yield a balanced outcome, be it a larger shipment volume or extended contract terms.
Coming prepared to the meeting with a couple of solutions will make for a more productive discussion and show initiative. Remember to propose ideas that benefit both parties to find mutual ground.
Ideally, negotiations should be conducted in-person or at the very least, over the phone. Opening a dialogue about payment terms can be intricate, and you don’t want anything to be misread over email.
When starting this conversation, the emphasis should be on finding a middle-ground solution, keeping an even keel, and reinforcing the value of the ongoing partnership.
To ensure the conversation is both productive and harmonious, consider the following email template:
Email Template:
Subject: Payment Terms Discussion
Hi [Client's Name],
I hope this email finds you well. [Personalize the email and express your gratitude for their business]
I'm reaching out to discuss the payments terms in your contract [personalize to reflect who is suggesting the change and acknowledge the reasoning]. As you know, we work hard to retain the best carrier relationships to move your loads reliably and on-time. Part of that is paying drivers quickly, so they can cover fuel and upkeep.
Knowing this, we would like to propose a couple of mutually beneficial solutions to the current [or proposed] payment terms.
Are you available to discuss this week?
Warm Regards,
[Your Name]
By laying the groundwork for a positive and collaborative conversation, freight brokers can effectively manage and strengthen their business relationships during payment term negotiations.
Negotiating with clients can sometimes feel like a tricky dance, with both sides aiming for the best terms. But the secret to a successful negotiation is simpler than you think: approach it as a partnership.
Follow these tips for a productive negotiation.
1. Know Your Strengths
Before diving into the negotiation, think about your competitive edge.
What makes your business a good partner? You may be an expert in a niche or local area. Maybe you’re working with specialized equipment and regulations.
Your strengths are negotiation tools. The clearer you are about why a vendor would want to keep you happy, the better you can discuss.
2. Start Friendly
Kick things off on a bright note. Inquire about their family. Maybe there is a local football game you can talk about. Setting a friendly tone from the get-go can make the whole conversation easier.
3. Show gratitude
Take a moment to let them know how important they are.
Mention something like, “Your business has helped my company grow.” It's always good to remind them that their business is valued.
4. Be Clear and Honest
When it’s time to talk about changing payment terms, be upfront.
Explain how an extended payment term will impact your business and carrier relationships. Dive deep into how your carrier relationships are built and retained by quick payments.
Share your reasons. Clear communication can lead to mutual understanding, making it easier to find the middle ground.
5. Frame a Win-Win Offer:
When you put forward your new payment proposal, ensure it's framed in a way that benefits both you and the vendor.
By highlighting the advantages for each party, you set the stage for a productive, mutually satisfying negotiation. Remember, the goal is to find terms that make both sides feel like they're gaining value.
6. Stay Open
Sometimes, the first offer doesn't stick, and that's okay.
If they're hesitant, be prepared with backup plans. Could you propose a trial period for the new terms?Or suggest staggered payments? Flexibility can make all the difference.
8. End on a Good Note
Wrap things up with optimism. A sentiment like, “We’re excited about our future together,” reinforces the idea of partnership and growth.
Successful negotiations are all about collaboration and mutual respect. When both parties feel acknowledged and valued, finding common ground is easier.
Unfortunately, freight and logistics companies don't have much bargaining power. Shippers can easily find another partner to meet their needs and for even cheaper. If a customer is unwilling to meet you halfway, you can seek cash flow support by factoring.
You don't necessarily have to wait out long payment terms. By utilizing freight factoring, you can receive an advance on the payment. In this arrangement, the factoring company provides the upfront payment, collecting the due amount directly from the client.
Alliance Logistix faced this situation when a long-time client moved from 30-day to 90-day payment terms. Co-Founders, Alex and Natalie, chose to work with Denim to maintain their cash flow and retain their customer relationship. As a result of the added automation tools with the freight payment system, Alliance Logistix has increased their month over month volume by 35%. Win-win for everyone.
In today's shifting financial landscape, balancing client demands with fiscal responsibility becomes paramount. The ripple effects of these changes challenge even major shippers to rethink traditional payment structures.
Brokers face the dilemma of catering to client requests while safeguarding their operations from extended payment terms and its implications. The key? Embracing strategies like early payment incentives and structured plans. For those seeking an effective buffer against extended terms, factoring solutions emerge as a powerful tool.
At the core, it's about fostering trust and mutual respect in client partnerships. With clear communication and strategic flexibility, brokers can navigate these challenges, ensuring both relationship integrity and business growth.
Looking for a factoring solution? Schedule a demo with us today and explore how Denim can support your business needs.
.jpg)
Freight payment platform Denim, announces the release of Denim Audit, an AI-driven freight audit solution tailored for freight brokers.
Denim Audit utilizes cutting-edge AI technology like ChatGPT and extensive industry expertise to ensure accurate invoicing and optimize document management. Our 20-second analysis checks proof of delivery, carrier invoices, and rate confirmations for inconsistencies. The result is a streamlined and efficient auditing process.
"Even minor discrepancies in freight invoices can accumulate, undermining the trust foundational to brokers and carriers. Denim Audit uses a combination of optical character recognition (OCR) and large language models (LLMs) to provide precise invoicing tools, ensuring accurate invoicing and timely payments for our clients. This helps establish trust between carriers, brokers, and shippers, giving our clients a competitive advantage," said Shawn Vo, Co-Founder, President, CTO, and COO of Denim.
According to the Freight Broker Pulse Report, one in three freight brokers indicated that a freight bill and audit tool was critical for business success. Since its soft launch, Denim has processed and audited over 100,000 documents and saved clients over 400 hours in manual auditing.
“Denim Audit is saving my business time. The new audit tool double-checks all of our documents and support has been helpful every step of the way. Denim is a part of the reason why I have been successful." said Marie Fargas, Romero Logistics LLC.
Denim Audit is available for all Denim clients and jobs, including wallet and non-factored jobs. For a demo of Denim Audit, contact us today!
Denim, a trusted freight payment system for freight brokers, today announced its partnership and integration with Quote Factory, a leading transportation management system (TMS) for the next generation of brokers to grow and disrupt the freight industry.
The single-click integration enables logistics businesses to process payments and access financing directly from their Quote Factory dashboard, reducing the time spent on redundant data entry in half.
“Quote Factory’s integration with Denim is remarkably intuitive, slashing the factoring process by fifty percent and rescuing us from hours of daily/weekly drudgery! What was once a somewhat laborious task has transformed into a swifter, simpler, and impeccably organized procedure. The integration’s seamlessness, coupled with its fail-safe mechanisms, ensures that no crucial details slip through the cracks, rendering the entire factoring process smoother. In today’s fast-paced landscape, every snippet of regained time holds immense value, particularly within the business realm. Thanks to the partnership between Quote Factory and Denim in launching this integration, we’ve gained the capacity to channel our focus towards other facets of our business.” – Jy Maze, President & CEO – Maze Freight
Additionally, Cameron McClure, President of MAC Freight Company, remarked, “Quote Factory's easy-to-use integration with Denim has saved me several hours a month and streamlined my back-office operations. As a result, I'm able to re-allocate the time into building new business and reinforcing our great customer relationships!”
Quote Factory and Denim aim to enhance the supply chain with this collaboration. Benefits of this integration for clients include:
"As logistics platforms evolve, the emphasis on intuitive user experience grows. Quote Factory’s clean and easy-to-use platform is one of the many reasons we are thrilled to partner," shared Sean Smith, VP of Product at Denim. "Combining Denim's robust payment functionalities with Quote Factory's easy-to-use interface, we're elevating the overall user experience and saving our clients significant time."
“We’re proud to partner with Denim. At Quote Factory, we prioritize simplicity and efficiency. This collaboration boosts our platform’s user experience, streamlining logistics for our clients,” said Brandon Dean, Chief Revenue Officer of Quote Factory.
For more details, visit Denim.com or connect with us on LinkedIn, Facebook, Twitter, and Instagram.
Details matter.
However, many logistics companies admit to incorrect payment information. A report from ControlPay found that only 17% of shipping invoices are accurate.
You spend hours securing new lanes. You’re diligent with your communication and deliver impeccable customer service. You complete jobs with safe and punctual deliveries. Yet, the final step— accurate invoicing and payment—sometimes falls short.
Freight payment and invoicing are more than just paperwork. Many shippers engage freight brokerages and 3PLs to avoid managing carrier payments. This adds value for shippers by sparing them countless hours in manual auditing and could reduce their staffing needs.
A single invoicing error from a brokerage or 3PL can jeopardize financial standings and hard-earned trust. Thankfully, there's an antidote: freight audit software safeguards against such payment slip-ups.
Key takeaways:
Accurate freight invoicing and payments are essential.
Often, blunders in these areas stem not from negligence but from oversights. Even the most meticulous professionals can overlook nuances.
Here are five common mistakes:
1. Inaccurate Billing Information:
Billing errors can occur due to incorrect input of important information. Incorrect information can include billing address, company name, or account number.
2. Overlooked or Duplicate Invoices:
Operational oversights, particularly during peak business periods, can lead to skipping invoices. Redundant software processes or data syncing issues might generate and dispatch duplicate invoices.
3. Missing Documentation:
Sometimes essential documents are missed or wrongly attached to a load. Such an oversight can lead to inconsistencies during invoicing and payment.
4. Inconsistencies Between Documentation and Data Entry:
Manual data entry is prone to human error. Payment will likely be wrong when data entry across systems doesn't match documentation.
Managing freight documentation and invoicing is vital to any logistics operation. While the mistakes highlighted are common, awareness of these pitfalls is the first step to ensuring accuracy.
A minor invoicing error may seem insignificant at first glance. However, its ripple effect can profoundly impact a business's finances and reputation.
Imagine a scenario where an invoice gets mistakenly issued for $3,500 when the intended amount was $5,300. A number switch can lead to a $2,300 shortfall. Such a simple mistake can have sizable monetary repercussions, especially if unnoticed.
The complexity escalates when third parties, like factoring companies, come into play. Sending an incorrect invoice to a factor for approval could delay payment to carriers and disrupt your cash flow. Even a day's delay can severely strain your finances.
But the impact isn't just monetary. Payment discrepancies can also leave a permanent mark on your company's reputation.
Requesting additional payment from a client due to an incorrect invoice amount is unprofessional. Such experiences can make shippers reconsider assigning you further loads. Their rationale? If back-office processes are sloppy, how efficiently can you manage increasing loads?
Remember, invoicing isn't just about numbers; it's also about building trust with your clients.
Losing focus and missing important details is common when dealing with heavy workloads and multitasking for long periods. Rushing to close deals and collect payments can cause you to overlook critical elements.
Enter the Freight Audit.
Freight auditing is a detailed review of freight bills, cargo logistics, and associated shipping data. The audit process promotes transparency and accuracy in shipping operations.
While a typical freight audit primarily focuses on financials, its scope is much broader:
Shippers frequently enlist third-party audit specialists or turn to the expertise of 3PLs and freight brokerages to manage freight audit and payments.
Freight brokers and 3PLs come equipped with specialized knowledge. This prepares them to spot and correct errors easily during the auditing process. With their guidance, they streamline freight operations and educate shippers on best practices and potential pitfalls.
Still, it's vital to note: even with all their experience, they can sometimes overlook a detail.
The Benefits of Freight Audits
Freight audits are crucial in ensuring accuracy and building trust in the logistics industry. Meticulously examining invoicing details safeguards businesses from potential financial discrepancies and reinforces their credibility with clients.
Here's how audits benefit invoicing processes:
Freight audits are the backbone of a transparent and efficient logistics operation, reinforcing accuracy and trust. With such significance attached to these audits, the methods by which they are conducted equally matter.
Two main ways to complete freight audits are manually or by leveraging software-driven automation.
Manual freight audits involve rigorous human intervention. This traditional method provides an in-depth, hands-on examination of freight documents and details. While it allows for thorough inspection, it is time-consuming, costly, and prone to human errors.
As the complexity of freight documentation grows, the possibility of overlooking discrepancies in numerical data and cargo descriptions increases. Errors can occur when cross-referencing various documents, even with the utmost precision and meticulous attention.
Often, larger organizations might employ a team to undertake these audits. An internal audit team introduces a cross-checking system to reduce potential oversights.
With technological advancements, the freight industry is seeing a significant shift in how audits are performed. Enter AI-based auditing, a method that revolutionizes accuracy and efficiency in this sector.
At the core of this approach is Optical Character Recognition (OCR). OCR technology works by scanning paper documents, like freight invoices, and turning the written or printed text into digital data that the system can read and process.
Once this data is digitized, the real power of AI comes into play. Instead of manually sifting through piles of invoices and cross-referencing various details, AI algorithms analyze this digital information. They are programmed to:
What sets AI apart from traditional methods is its learning capability. As the system processes more data, it learns and adapts. It picks up patterns, understands common issues, and sharpens its accuracy. This continuous learning means that the AI-based freight audit software becomes even more proficient at identifying potential errors or issues in the auditing process over time.
The benefits of AI-based freight audit software are evident. AI-based auditing can process vast amounts of data at incredible speeds and ensure a level of precision that's challenging to achieve with manual methods. By integrating AI and OCR into freight auditing, businesses stand to gain a more accurate, efficient, and streamlined verification process for their invoices.
Manual audits, while thorough, are not only time-consuming but can also be riddled with human errors. In fact, the average cost to manually process a single invoice can be up to $15, adding up quickly over numerous transactions. In contrast, automated audits harnessing the power of AI provide rapid results with heightened accuracy, all while reducing overhead costs.
By embracing automated methods, freight brokerages conserve significant time and resources. This newfound efficiency empowers them to channel more energy into expansive strategies and innovations, setting the stage for a modernized approach to freight management.
Even the most attentive professionals can face challenges ensuring accurate invoicing and payments. As illustrated, minor oversights can escalate into significant financial and reputational challenges. Freight audit and payments are not just an operational necessity but an indispensable tool for maintaining trust, optimizing operations, and ensuring financial accuracy. But what if there was a streamlined way to simplify and bolster the auditing process?
Denim Audit uses AI technology similar to ChatGPT to identify discrepancies and streamline your document management process. Documents like proof of delivery, carrier invoices, and rate confirmations are scanned automatically within seconds, providing matching results or flagging any inconsistencies with a job.
The result? Expedited payments and minimized discrepancies, ensuring your operations run smoothly and your reputation remains untarnished. By incorporating Denim Audit into your operations, you ensure your invoicing remains as flawless as your freight operations. Book a demo today to see Denim Audit in action.
