The way of the freight invoice: driving data value

Pieter Kinds

Pieter Kinds

November 2, 2015 - 16:18

Working 11 years at ControlPay, our implementation director Maria Lisovenko has seen some major changes in the freight audit & payment industry. One of the most influential changes for logistics and finance has been the way paper invoicing was replaced by electronic payment. From the Freight Audit providers perspective, this change had a huge impact on the way we drive value in today's transportation landscape .

For starters, let me explain the basic principles of our business. The core service provided by ControlPay is freight auditing. For our clients this means that none of the carrier invoices will be sent for payment until the data is verified by ControlPay. This means that each carrier has to deliver its final invoice to ControlPay, which will be send for further payment, after auditing and approval by ControlPay.

When starting the business 13 years ago, ControlPay processed thousands of paper invoices on weekly basis. During those early days, electronic invoices were still a kind of myth. The freight payment process between large corporations and logistics carriers consisted of large paper trails going back and forward, pending for a big 'approval' stamp. As you can imagine, a lot of time, effort and money were spent until an invoice reached the final point.

A standard flow of paper invoice was in such way:

Day 1: Carrier got billing instructions from ControlPay

Day 2-5: Carrier issued paper invoice and sent it by post to ControlPay

Day 5-7: Paper invoice received at ControlPay and entered to the system

Day 8: if invoice created correctly - approved and sent via post to Shipper; if invoice incorrect - denied and carrier has to issue the new one.

It was obvious that above process had to change. The high grade of ineffectiveness and complicated paper trails were a thorn in the side for shipper, and carrier. For starters, it took a minimum of 8 days to approve the audited and correct invoice for final payment. Many invoices had to be rejected due to incorrect data and sent back to the carrier, which meant another 8 days required to receive the paper invoice and be able to verify and approve it before payment.

Freight invoice automation tool

When the industry techniques started developing, the freight payment process changed as well. The way we handle and process freight invoices today, and moreover the way we deliver data value, has strongly improved over the years. One of those major developments took place about 6 years ago, when ControlPay created a freight invoice tool which allowed logistics service providers to create their final freight invoice directly in the ControlPay system. This digital invoice can be created just in one click the same day when billing instructions are available in the system. This tool reduced significantly the time on final invoice audit and provides a 100% guarantee that the carrier invoice will be paid within agreed payment term.

We strive to optimize processes during, but also after the implementation process, for both clients and logistics service providers. The idea of the auto invoice was created during one of our team meetings. We had been able to ascertain that there should be an optional tool for carriers to create a solid freight invoice online, based on the given billing instruction provided by ControlPay. Nowadays, we see that many large and small carriers like to use this for the ease and speed of the freight payment process. The invoice is always in the same format and always correct.

Furthermore, with this freight payment solution, paper is eliminated where legally possible and the billing process is far more efficient because many manual handling points in the audit, coding and payment process are automated. This means that a great deal off effort is reduced for the finance department for both shipper and carrier, and the FTE involved in the process is almost negligible.

More ControlPay freight audit and payment tools

We created this tool because paper invoicing still raises many difficulties for businesses, including a lack of flexibility and a higher risk of human error or invoices getting lost. By moving the invoicing process online, technology is providing flexibility and visibility to both businesses and their suppliers, as well as reducing fraud and limiting the room for mistakes.Late payment of invoices causes risk

Freight Invoice: What logistics and finance should know

About Maria

Maria is with ControlPay since 2004 when she started as an Invoice Auditor. With a clear analytical mind she has been active in customer implementations from an early phase and started to manage the newly formed Implementation Team in 2010 which she still does today.