Top Third-Party Logistics Billing Challenges
Over the past 14 years, we have seen thousands of logistics professionals struggle with the same widespread billing challenges that impede warehouse growth. In fact, our recent billing best practices webinar survey of 3PL warehouses showed that 82% of respondents lost money due to uncaptured monthly shipping, receiving, and recurring storage charges. This raises the question, what contributes to this lost revenue?
As a company that has helped thousands of 3PLs, we can tell you, culprits include: time-consuming, manual billing capture at month-end close, inaccurate charge capture, and lost opportunity cost from using customer service representatives for billing activities rather than customer service and revenue-generating activities. This post shares billing best practices to help 3PLs automate charge capture, grow their bottom lines, and ultimately free up their staff’s time for customer service.
Best Practices Overview
￼Automate when you can and capture real-time charges by using mobile devices or PCs. You want to automate billing and invoice management to reduce errors, ensure all charges are captured, improve billing accuracy, and accelerate painful end of month billing processes. Our webinar poll demonstrated that 54% of 3PLs take three or more days to deliver invoices to customers. Warehouses that automate billing and integrate their warehouse management system (WMS) with accounting applications such as QuickBooks can reduce the time it takes to send out invoices from several days to several minutes, drastically reducing days sales outstanding for services performed or recurring storage charges. What are some specific ways that warehouses can automate their billing?
3 Easy Steps to Automate 3PL Billing
Warehouse Management Systems such as 3PL Warehouse Manager help operations managers adapt their current 3PL billing process to automated workflows. Follow these three easy steps to automate shipping, receiving, and recurring inventory storage charges:
Step 1. Adapt Current Billing
First, modify your standard rate sheet so that new customers are easily automated. Second, negotiate with existing customers to encourage them to adopt new rate sheets. These rates can be digitally stored in a 3PL warehouse management system and utilized from a mobile device to capture charges on the warehouse floor.
Step 2. Setup Automation
Charges can be set up with “billing scripts” that automate how much to charge for custom services such as breaking down or assembling pallets and recurring storage fees. Implementing this billing automation can take time to setup and test properly, but we have seen warehouses boost profits by 3% on average every month after automating their 3PL billing process.
Step 3. Run in Parallel
Test in parallel with your existing billing methods during the transition period, so you can clearly see the efficiency improvements and revenue impact during this period. This avoids any interruption to your current operations and gives your warehouse time to adapt to the new billing workflows.
Capture Value-Added Billable Services in Real-Time
For warehouses looking to boost operational efficiency and improve billing accuracy, implement real-time charge capture. You can accomplish this in two ways:
- Implement Mobile Scanning Capture: Capture value-added services as they occur in real-time for the best results. Mobile charge capture enables staff to capture receiving charges as services are completed, reducing the need to search for manual receipts.
- PC or Tablet Capture: For those 3PLs who don’t have mobile devices, setup a warehouse PC station for team members to capture value-added services on the warehouse floor.
The benefits of this approach are two-fold. First, mobile charge capture provides 100% billing accuracy. Second, staff no longer have to track down past charges written on paper or stored in an Excel file on somebody’s hard drive. All charges are immediately accessible in the cloud through a WMS as soon as the service is performed. This substantially frees up your staff’s time for customer service and eliminates timely reconciliation processes. For 3PLs who service ecommerce customers and need to manage large volumes of receipts and orders, implementing these processes can save substantial time and dramatically improve billing accuracy.
Integrate Your WMS with Accounting Systems
A majority of the 3PLs we work with use QuickBooks to manage their accounting and to process invoices. It can be tedious to work with two separate applications: a WMS for warehouse operations and another window for managing accounting. Implement a WMS that integrates with your accounting system to create a seamless 3PL billing process. This integration gives warehouse managers the capability to automate invoice generation for customers, provides customers with an easier invoice payment experience, and enables warehouses to collect payments faster.
Automate when you can and capture real-time charges by using mobile devices or PCs. By applying these billing best practices, you will get paid faster, reduce human error in billing capture, and save your staff’s precious time for billable activities. To learn more about billing automation, request a demo by clicking here.
Written by Eric Ripley
Eric Ripley is a Solution Architect at 3PL Central whose job is to interface directly with customers to resolve technical and operational problems. With 12 years industry experience, he's helped countless 3PLs with creating workflow solutions to improve operational efficiency.