Why should you automate your freight bill audit and payment?

Industry 4.0 is also an era of supply chain digitalisation. There is a growing need of automating operational processes, to bring in efficiency, improve productivity and fuel continuous improvements. Ask any finance or logistics expert, and you will hear a common complaint: Freight payments are critical to operations, inherently complex, and are fraught with inefficiencies. Freight Bill Audit and Payment (FBAP) is a prime suspect for such operational improvements. Good news is - the technology landscape has evolved to enable organizations to do exactly this. From ePOD systems and RPA enabled automations to AI-ML backed insights and predictive capabilities, we have all the rocket fuel needed to automate Freight Bill Audit and Payments.

Why do you need automated FBAP Processes?

Usual suspects of any payments audit and reconciliation are also relevant for FBAP. Information asymmetry between Procurement, Finance, Logistics and Customer Representatives, disputes across multiple line items and headers, frequent duplicity, multiple approval cycles and hence long payment cycles - all marr the FBAP space as well. What makes FBAP especially complex is the non-standard contracts, difficult to measure and validate cost headers like detention, and multiple sources of validation (POs, Rate contracts, ePODs and Invoices). The payment cycles can go upto 90 days, from invoice raised to payment completion - often extending up to 180 days. This also consumes significant bandwidth from the finance teams in long-winded reconciliation and provisioning.

What value does automated FBAP processes add?

A thoughtfully automated FBAP process, backed by the right systems can:

• Help carriers auto-generate freight invoices, on auto-calculated charges across various headers like base freight, detention charges, ODA, tolls etc. Any deviations can be backed by relevant proofs at the same place. This helps in two ways. One, Only invoices with such deviations need scrutiny - dropping the # of invoices to be reconciled by 40-50% right away. Two, the proofs for backing these deviations are available at the same place - making it easier to verify and collaborate with the carrier.
• Align carriers and shippers across shortages, damages etc, and reduces disputes on any penalties through transparent ePOD-backed GRN processes
• Simplify freight provisioning to a single click - helping finance teams in building BU / product/ region level P&Ls, as well as plan budgets better for the coming months and quarters level
• Manage separate repositories for credit and debit notes - further simplifying reconciliation
• Support auto-approval, and threshold-backed approval workflows to reduce noise for senior finance leaders
• Reduce average invoice-to-payment TAT by >80%

The Pando FBAP solution is helping customers drive all the above outcomes. Learn more here.