Checking the check: Why billing mistakes slow down supply chains
Thursday, April 05, 2018
In logistics, a great deal of discussion surrounds methodology — speed is crucial to the supply chain in terms of fulfillment. Money, however, tends to shift to the backburner — quotes, line items and invoices.
Payments, however, are arguably the most important goods carried along the supply chain, and they are a product that must be handled with care. So why should you focus on improving your response tactics for shipping payments?
Because haste makes (financial) waste
Under the increasing pressure to move goods and supplies ever faster between shipping nodes, there's precious little time to mull over paperwork. Trusted business partners sign off on deliveries and shipments and generally only take a closer look if something is egregiously wrong.
Smaller charges north or south of where they should be slip by, quietly accumulate and wait to throw off YOY or EOY reports in unpredictable ways. Already-thin margins become more stressed, and a supplier with a competitive financial edge can suddenly — and incorrectly — look like a weed in need of pruning.
Whatever financial benefits stand to be gained by speeding up supply chain timelines should always be carefully balanced against what margins of error might increase as a result. If your company is considering compressing certain timelines, always remember to test holistic chain ability, not simply the physical movement dates of products.
Is it possible and viable to do the accompanying paperwork, to the same level of scrutiny, in that potentially shorter time frame? If the answer isn't a clear yes, speed won't make a positive difference in your overall efficiency, and may even make a negative one.
Because they're an important competitive tool
If you haven't heard about the driver shortage facing 3PLs nationwide, you haven't been paying attention. As transportation companies hemorrhage drivers due to career changes, retirement and general lukewarm response to the profession, money becomes the universal language.
When invoices are received and processed with the same alacrity as products move along the chain, those companies are better empowered to attract — and keep — their best performers. When line items need to be chased down and corrected, or payments stretch beyond their terms, those aforementioned slim margins become uncomfortably tight — and speed is often the first casualty.
When your company treats those shipping invoice payments as a priority, don't be surprised when you get the same beneficial treatment in return.
Because they promote clear communication
Imagine you're working at a 3PL and you receive an invoice that contains a list of services requested, but the price is missing off the last three items and isn't reflected in the total. To go a little further, imagine you're up against a deadline, facing company rules about not providing services without a completed invoice, and you need to make a snap decision.
You're more likely to err on the side of caution where your company is concerned and send out the shipment without those three services attached. You may have made the right choice as far as your own company is concerned, but that leaves your customer in the lurch — a situation that could have been completely avoided if they'd audited that outgoing request.
Double-checking invoices, or ideally having a process that does that checking for you, is the fastest, most reliable way to keep miscommunications out of your orders. It may seem simplistic, but when your orders are complex, it could save you hundreds or thousands in opportunity, expedited process and replacement costs over time.
Keep your supply chain up to speed. When the invoice arrives, look it over carefully. Pay it as quickly as possible within your agreed-upon terms, and if you see something unusual, reach out to your providers.
The end result will be a faster, higher-quality experience, fewer headaches and lower costs for everyone in your chain, including you.
- Back to the future with Ford bioplastics
- Stemming the tide: Let’s save the manual transmission
- Emerging green building material technologies to watch
- 3-D printing is revolutionizing construction and design fields
- Common mistakes that lead to adhesion failure
- Knight shines bright in trucking industry
- Steel-toe or composite-toe work shoes: Which should you choose?
- Titanium vs. tungsten: Which is the most resistant to corrosion?
- Is your small business making YouTube videos yet?
- Simple changes we can expect to see in workplace environments
- Can controversial coal be shipped from old military bases?
- A better way to explain the job to candidates
- Advertising and the city: Are billboards a threat to public space?
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How