The Impact of Digital Freight accounting on workflow: Logistics, Finance & Transporters

A successful logistics cycle is no longer restricted to a seamless delivery; instead, it ends at ensuring optimum freight invoicing operations. Crucial processes like invoice generation, reconciliation, freight invoice auditing and freight evaluation jointly contribute to efficient bill settlements. Leading industry players aim for consistent strategies to optimize this process stage to improve logistics performance. 

The wave of digitalization across the logistics sector is set to reform the freight bill payment dynamics. Transport management Systems (TMS) automate these stages to empower various stakeholders within and beyond the organization- from logistics to finance to carrier partners. 

How does digital freight accounting provide an upper edge over the primitive modules?

Freight Invoices are substantial to both shipper and transporter satisfaction and bill settlement efficiencies infuse trust in the freighter-carrier relationships. Traditionally, when invoices were generated and reconciled manually, bill payments were a tedious task. Businesses eventually switched to a digital-driven workflow to simplify operations.

Freight Invoice Processing: Manual Vs. Digital

Freight invoicing workflow requires maximum data accuracy and seamless execution, which a technologically advanced solution ensures. Let’s explore the underlying differences between a manual and automated module:

Activity	Manual	Digital
Invoice Generation	Transporters determine the invoice dynamics via manual estimations Unidentifiable reasons for escalations Prone to human errors Time-consuming High chances of duplications	Automation-driven invoice generation in compliance with contract rates Insights into reasons for escalations Power of automation technology to eliminate errors Faster cycles Zero duplications with automated cycles
Submission	Lack of real-time invoice transfer via emails, Whatsapp, etc. Coordination gaps leading to delays	Real-time submission to the finance teams via EDI Seamless coordination across the stakeholder units
Reconciliation	Time-intensive reconciliation increasing the TAT Prone to errors and miscalculations Sub-par operations leading to financial losses	Automated reconciliation as per the contract terms Technology-driven accuracy Efficient and faster reconciliation cycles
Compliance tracking	Sub-par tracing of deviations from contract policies/ rate escalations Time-intensive manual follow-ups Inefficient insights into penalties affect transparency & lead to losses	Automated capturing of any deviation/ rate escalations from the contracted terms Data insights into penalty causes to enable easy justification Data insights into deviations from contract terms and pre-defined rates Auto-debits on non-compliances
Approvals	Delayed approvals due to absence of real-time coordination platform Siloed communication affecting management efficiency	Real-time confirmation and approvals across finance, logistics, operations and carrier partners Digital alerts for pending approvals One-window collaboration platform
Payments	Prone to payment disputes Delayed and inefficient freight invoice settlements affecting shipper-transporter relationships	Faster and error-free freight e-payments linked with ERP, resulting in higher transporters’ satisfaction No disputes with digital settlements and faster redressal (if any)
Audit	Sub-par freight auditing cycles affecting performance tracking	100% audit compliance enabling efficient tracking of team performances
Data security	Paper trails are vulnerable to unauthorized access, damage and misplacement	High data confidentiality Cloud-based documentation of contracts and invoices Customizable user rights management

Benefits of e-invoicing: Logistics, Finance & Transporters

Processing freight invoices is a complex operation involving myriads of approvals, data exchanges and freight evaluations. A minute discrepancy can result in significant delays, detention, monetary losses and a lack of trust among the stakeholders.

Freight accounting solutions facilitate advanced functionalities to assist the stakeholder units in daily operations, improving team productivity and logistics performance.

Choosing the right invoicing solution

The multi-facet advantages of freight invoicing must be addressed in an industry set-up as competitive as the current one. As more enterprises are switching to a digital freight invoicing and payment model, TMS solutions are gaining popularity. A competent technological solution can optimize the workflow with state-of-art features, improving the stakeholder experiences across the supply chain network. It eventually helps manufacturers leverage the better scope of growth and profitability via collaborative efforts.