Consolidated Freight Invoicing: What Is It and How Is It Beneficial?
Consolidated freight invoicing is a practice often overlooked by many shippers, but is a resource that can save both the logistics team and the finance team a lot of time and energy. The LTX finance team not only processes a full freight audit & payment but also implements a consolidated freight invoice program for each of our clients. Here we will discuss what exactly consolidated freight invoicing is, and how it benefits your company.
What is Consolidated Freight Invoicing?
Every parcel, less than truckload and truckload shipment inbound or outbound produces its own paperwork. Then there’s the fact that many companies don’t use just one carrier or mode, but multiple, leading to a growing heap of invoices on your accounts payables desk.
In addition to that, each vendor has a unique invoice format and billing cycle. This makes accurate reconciliation, and on-time payment even more complex for your finance department. With consolidated freight invoicing, you can kiss all of those issues goodbye, and your finance department will thank you.
Consolidated Freight Invoicing combines all of your shipments, from each carrier you work with, into one, streamlined invoice that can be automatically merged into your TMS software. You can then sort your shipments by the carrier, pro number, date, weight, cost – all with one click.
The Solution to Finance and Logistics Collaboration
More often than not, the logistics/transportation manager is not the one responsible for the freight account management. That role is typically reserved for the finance department or CFO. The issue here is there is often a disconnect between these two departments with no set process to close the communication loop.
The person handling the invoices in accounting isn’t always tuned in to what the rates should be, accessorial charges, and other unknowns which can make in-house freight auditing difficult and high-risk for overpaying invoices.
The logistics manager, on the other hand, has the knowledge of freight rate and working with carriers, but isn’t seeing the big picture of how it all affects the bottom line. With consolidated freight invoicing both departments are better informed, and the cost savings of effective freight management can be attained.
The Benefits of Consolidated Freight Invoicing
Data Analytics & Reporting
Consolidated freight invoicing gives you clean, detailed, accurate data perfect for data analytics and reporting. You can easily track accessorials, fuel surcharges, mileage, frequency to state, price per pound, and much more.
On Time Payment
When a streamlined procedure is in place, consolidated freight invoicing produces a shorter turn-around time on payment processing. This ensures that accounting can close the books on time every month, as well as eliminate late fees.
Eliminate Duplicate Payments
Once the payments for these invoices are sent out, there will be a status change within the TMS system allowing you to see the date, time and reference number of each payment. This eliminates duplicate payments, saving you money.
One Check and You’re Done
Without consolidated freight invoicing, accounting could be processing 30-40 payments a week. With this program in place, the auditing is done on the front end and the finance department then has the ability to upload pro numbers or reference numbers into their accounting platform globally instead of rattling off checks and logging them individually each week to multiple vendors or carriers.
Your consolidated freight invoices should be automatically updated into your TMS system weekly, which gives you tons of functionality when it comes to your data.
Request a freight invoice adjustment
Access all supporting documents such as the BOL or re-weight certificates
View all previous shipments by date, carrier, consignee or pro number
In summary, consolidated freight invoicing streamlines your invoicing and payment process giving your finance team the opportunity to focus on other tasks and your logistics team transparent, easy to find shipment data.
When looking for a 3PL to partner with, don’t forget to ask if they have consolidated freight invoicing as one of their services. Here at LTX, we can assist with all of your freight accounting needs including auditing, consolidated invoicing and payment. Contact us today for a free consultation, and to learn how we increase your supply chain efficiency and have your finance department singing your praises.