Dive Brief:
- A new white paper published by SWG and provided by the Loadstar found that 83% of freight invoices are inaccurate, resulting in hefty fees for shippers ranging from 2-6% of the original shipping cost.
- The paper also found that 70% of all invoice processing involves "document handling, auditing and payment processing" which can be eliminated by automated payment systems.
- By switching to an automated payment system, shippers can avoid inaccuracies and slash costs at the same time, while protecting themselves from invoice fees as a result of inaccurate invoices.
Dive Insight:
Shippers and forwarders, collaborators in an industry rife with errors, inaccuracies and mistrust, have been slow to automate an accounting process that will ultimately save them time and money. By automating invoice processing, they can reduce costs and streamline the document handling, auditing, and payment process, saving both time and money and increasing customer satisfaction.
Yet, this could be a steep hill to climb for an industry that spends an exorbitant amount of time checking and resolving invoices, researching errors, and working to adjust payments. Many in this industry work under the assumption that invoices are incorrect spending considerable human and financial resources to audit invoices and resolve errors, often manually. The cost of this inefficient process is passed on to the customer, inflating the actual cost of the service. This is an industry ripe for change in both process and behaviors. Automating payment technology can drive the transition.
Generations also come into play. Many relatively new to the workforce find inefficient practices that have lasted for decades, based in the ‘we’ve always done it this way’ mentality. They are also quick to look to technology to solve relatively simple problems. The same goes for entrepreneurs seeking to disrupt industries by creating tools that bypass complicated legacy systems and go right to the heart of an inefficient and mundane process, such as freight invoice automation.
As technology has evolved, rapid acceptance of cloud-based services, mobile devices, and an ‘app’ culture has spread to many business functions. For those quick to personally download an app to solve a problem — from requesting a ride to ordering dinner — a fairly straightforward technological solution such as automating freight invoices comes with a fairly low barrier of entry.
