In today’s challenging world of logistics and supply chain management, real-time access to clean freight payment data is the ‘magic bullet’ for solving your logistics problems and increasing efficiency in your supply chain. Intelligent Invoice Management is a customized, advanced freight payment solution that captures not only financial data but logistics data too.
Consumable Financial and Logistics Data
In my last blog, I talked about the three macro-trends that are changing the way shippers approach transportation management (customer demands, end-to-end visibility requirements and increased supply chain complexity). These are challenges that all companies dealing with freight are trying to tackle, but most lack the clean, standardized data that’s required to solve their issues. Think of it like trying to fly a plane without an accurate navigation system things are moving fast, but no one seems to know where they are going.
Without clean, standardized data, it’s hard for a company to develop sound strategies to deal with these three macro trends. Traditional freight payment and audit is geared towards finding an incorrect freight amount and adjusting the invoice to match the contracted rate to pay the freight invoice. Because of this, freight payment data only captures the financial data and doesn’t have a place for the logistics data, such as order number, item information and time in transit. TMS software lacks the ability to cleanse the data, so it’s not able to perform the real-time analytics that can provide the information needed to make the data actionable and allow the company to diagnose their problems.
By using RateLinx Intelligent Invoice Management (IIM), the only software that integrates, cleanses, and standardizes the financial, track & trace, and shipment data in real-time, our customers finally have a full and clear picture of their logistics operations. IIM is built to refine raw freight data and make it consumable by the user in real-time.
Clean Data: The Key to Optimizing Your Transportation Management
At RateLinx our first (and most important) job is listening to our customers to help them solve problems. During these conversations, we often hear that their freight payment data is a month or two behind and littered with gaps. The TMS data is only a portion of the total freight data they are responsible for. So, when they hear about Intelligent Invoice Management, they tell us that real-time access to all their data is very compelling.
Typically, the customer already has a freight payment solution, either through a third party, or a module within their in-house TMS. We then talk about the rate tolerance that has been implemented in the freight payment process to account for all the rate discrepancies that have been deemed to be not significant enough for a person to resolve. Because the process of resolving an issue on a shipment that occurred a week or two ago is very lengthy, the cost of a team member’s time required to resolve the issue is greater than the rate discrepancy itself. Instead of paying for the staff it would take to reconcile these issues, the company just pays the incorrect freight invoices.
This creates bigger problems down the road when the company uses this data to perform RFPs using historical data and analysis where the historical data will be rated correctly. Often any potential freight savings they find through their new strategies are false. The savings they are finding is the rate tolerance that they’ve placed on their freight payment process.
IIM’s $0.03 Tolerance Saves Hundreds of Thousands of Dollars Per Week
Recently, RateLinx helped one of our customers save hundreds of thousands of dollars per week in freight cost reduction by addressing issues that have been deemed to be ‘not worth it’ to solve. Like many companies in the industry, the client had a Gartner Magic Quadrant TMS installed, and was using the freight payment module within that software. When RateLinx examined the data, we were finding a $1,200 truckload move was off by less than $20 on average. Most of the time we find a rate tolerance around the $20-$25 per shipment range, so these invoices were within the tolerance.
Once we turn on IIM and it begins to cleanse the data to ensure the invoice data is matching the contracted rate, the tolerance is dialed down to $0.03 (which accounts for rounding errors). The system starts cleansing thousands of invoices that were getting paid due to the old rate tolerance. This now provides clean, real-time data for reporting. They also have accurate data to use for their RFPs and to run analytics on, so the real value of IIM is much higher than just the reduction in freight spend which was considerable.
We also work with customers to identify other potential savings. With clean, standardized data, the single rating engine that is part of IIM can perform real-time analytics to show the company how they are really performing. The lost-savings KPI shows how they are performing with respect to their routing guides. The potential savings KPI shows how much each of their rules are costing them. The carrier metrics can display their load acceptance levels and their on-time delivery levels for each carrier.
Real-Time Access to Data in less than 30 Days
The advantages of using RateLinx Intelligent Invoice Management are many, and the best part is how quickly we can install IIM so the savings can start as soon as possible. Typically, this takes 30 days or less. It can start by using the freight invoice (EDI 210), the shipment tender record (EDI 204) and the track and trace information (EDI 214 or API) that most companies are using today. Our team of experts will be there every step of the way to ensure things go according to plan. Our ‘3D’ approach to logistics (Diagnose, Develop, Deploy) results in a custom install that is specifically tailored to solve your most pressing logistics problems, with no IT support required.
If you’d like real-time access to all of your freight and logistics data to reduce costs and improve your freight operations, please contact us today.