advanced technology, the transportation and logistics industry can reduce costs, improve efficiencies, and increase collections activities.
Over the last two years, the transportation and logistics industry has seen disruption and challenges like few others. The transportation industry is the backbone of our economy, and this boomerang of challenges has exposed key vulnerabilities across the industry. In 2019, the U.S. trucking industry moved 11.84 billion tons of freight, equating to over $770 billion worth of freight.
From a global pandemic to natural disasters to canal blockages and around the horn again, transportation and logistics providers have had to face an onslaught of challenges leading to cancelled orders, goods stranded in-transit, and warehouses that couldn’t ship or receive. After months of ports and industries closed for business, the organizations had to get the pipeline flowing again. While this was occurring, they had to simultaneously expedite the delivery of critical parts and materials in many industries.
These key factors have led to a resurgence of efforts within the industry to focus on resiliency. Managing credit, collections, and cash flow on a manual basis in this chaotic environment was more difficult and costly than it needed to be. While today, many transportation companies rely on either accounts receivable factoring services or freight invoice factoring to improve payment processes, automation helps to maintain orderly business transactions in difficult conditions. Accounts receivable (AR) automation, in particular, improves efficiency, reduces costs and increases collections and cash flow.
Today, transportation companies need to leverage automation to limit days sales outstanding (DSO), while providing a competitive customer experience. Transportation accounts receivable software can do a lot to drive payments faster, while decreasing the amount of manpower and third-party solutions needed. By taking advantage of online bill pay that exists in transportation invoicing solutions, organizations can decrease invoicing costs even further.
Transportation invoicing shouldn’t be as difficult as it is today. Taking advantage of software can keep disputes to a minimum, and payments high. By automating their accounting workflow, transportation and logistics companies can reduce costs, improve efficiency, increase collections, and keep cash flowing.
At this same time, because they are facing innumerable factors today, transportation and logistics providers should revisit their risk appetite and update procedures accordingly. These include:
- Performing credit checks on all potential customers.
- Review existing contacts and payment terms to make sure they are competitive, and consistent against the organization’s risk appetite and ability to stay financially healthy.
- Monitor accounts receivable and set alerts for past due accounts to initiate follow-up.
- Make it easy for customers to pay on time by accepting all forms of payment including electronic transfers, ACH, credit cards, and paper checks, to name a few.
- Issue invoices promptly. Use templates and check for accuracy to avoid errors which will delay payment.
Award-winning Lockstep offers an automated accounts receivable software and transportation invoicing solution that integrates through the most popular financial and transportation management software, today.