Payment of freight invoices is a critical function. If it is not managed properly, it can cost a company annually thousands of dollars in just late fees alone. However, today’s businesses are trying to do more with less, especially when it comes to its number of employees. And, with less staff and an increasingly complicated work environment, outsourcing freight payments may just be the answer.
Why the Name of the Game is Outsourcing
The shipment of goods can be one of a company’s largest expenses; therefore, it is key that best practices are implemented to achieve efficiencies and to ensure costs are kept in line with expectations. The top reasons to outsource to a third-party company are:
Avoid Late Fees
Accounts payable staff handle invoices from all types of vendors. All vendors, including shippers, have their own payment terms. Companies, however, often have general payment terms of 30, 45 or even 60 days, which are used no matter the invoice that is being processed. This can result in thousands of dollars in late fees annually. For example, one major shipper charges a six percent late fee even if payment is received only one day late.
By outsourcing your freight payments to AllGreen, late fees will be eliminated. We deal with shipping companies daily and carefully track each carrier’s payment terms. Our team knows if a shipper starts the invoice payment clock ticking based on invoice date, receipt date or ship date. This in-depth knowledge can be critical to saving you thousands of dollars each year. For example, AllGreen structured a pre-payment agreement with one client, which resulted in the elimination of late fees and an annual savings of $13,000.
Eliminate Costly Manual Touches
Processing freight invoices is a necessary but costly activity for companies. Data entry is a key component of processing freight invoices, much of which is done manually and is therefore, error-prone. Additionally, data entry jobs have a high turnover rate, making it difficult to achieve long-term efficiencies. With the many costs associated with accounts payable functions, processing just one invoice can run from $7 to $20.
AllGreen manages freight payments for hundreds of companies every year. Our fine-tuned payment process reduces the number of manual touches and errors, which can mean dramatic cost savings for our clients. On average, 50 to 90 percent of the processing cost of every freight invoice is eliminated.
Achieve Efficiencies
Along with processing freight payments, come the tasks of GL (general ledger) coding and auditing. Both these functions can be quite burdensome if staff are not properly trained. Incorrect or lack of auditing can result in the loss of thousands of dollars. Late deliveries are often not discovered in the required timeframe in order to receive valuable credits while incorrect GL coding can result in other issues such as inaccurate tax reporting or erroneous data.
Many companies hire AllGreen for auditing initially. However, these same businesses often upgrade to our all-in-one solution of auditing, coding, and payment processing. With our skilled expertise, companies experience efficiencies they were unable to achieve with in-house resources. We also provide comprehensive reports, which are conveniently sent to clients in a weekly email. Furthermore, companies receive a bundled rate, making it not only more efficient but also more cost-effective.
AllGreen: Your Outsource Partner
In the right situation and deployed wisely, outsourcing can be a fantastic way for business owners to improve efficiencies and bolster their company’s bottom line. However, it is key to hire the right outsource partner, especially when it comes to the critical area of freight payments. A third-party partner should ensure your business
· Avoids late fees
· Eliminates costly manual touches and
· Achieves efficiencies
The AllGreen team realizes the impact freight payments can have on a company’s financial situation. If not managed properly, the results can be devastating. As an outsourced partner, the AllGreen team will use its years of experience to achieve the best possible outcomes for your business. To learn more about our services, contact us today at info@ag-sc.com or 847-531-2209.