SHOW ME THE MONEY
I have been working with a company in the retail fixtures industry for the last few years to find a way solve a persistent problem. Their dilemma when we started was like that of many of our customers who do a significant amount of prepaid and add freight business with their customers. The company needed to invoice transportation charges correctly and immediately with a minimal margin of error!
In this particular case, the company wanted to do prepaid and add-on almost all of itâs customersâ freight to reduce the number of carriers that bump their docks on a daily basis, thus saving them significantly in labor costs. The challenge was twofold:
- No conduit or process was in place to generate a comprehensive invoice at time of shipping.
- Carrier pricing was not established with all the rules clearly defined to generate accurate, solid costs to add back to their customers invoice without having to wait for the carrier to bill for services rendered.
How were these issues solved? Total Insight assisted the company in developing a bill-of-lading file that generates from their SAP/ERP system and flows into Total Insight to be rated each evening then returned to each morning to print or electronically send to the customer along with a sales order invoice. This process garnered an almost immediate 99% billing accuracy at time of shipping and allowed for a marginal mark up to cover labor costs associated with the shipping process, which was not being captured prior to the institution of this process.
In the world of transportation, there is no standard when it comes to pricing a particular transaction in any mode! To further complicate the situation, there are rules in how the pricing is applied that greatly affect the final invoice costs. That was recognized by this particular client, and it allowed us to negotiate pricing and rules that today is 15% better in price, compared to where the company was 5 years ago with its LTL carriers. That is a huge savings, considering each LTL carrier has announced a 5% to 6% general rate increase each year since that time.
By allowing us and Total Insight the opportunity to perform both these functions on its behalf, this client has enjoyed the following:
- Streamlined dock operations
- Increased cash flow
- Credible and defend-able carrier pricing
- Reduced internal administrative time in the carrier-billing processes
- Accurate shipping invoicing practices with incremental profit
Source: New feed