With Freight Payment You Get What You Pay For

May 5th, 2009 - by billd

Why is Freight Payment, the payment of carrier invoices, so often considered an afterthought? When asked many transportation managers are not at all happy with their Freight Payment service, but consider it a necessary evil. As long as the service is inexpensive (cheap), they’ll deal with the problems as they come, even if this means hiring the services of full time or temporary personnel to mask the inefficiencies of the process. In addition, many companies hire Post Audit firms to verify the payment accuracy.

Carriers apparently feel the same when it comes to the subject of billing accuracy. Many of the problems created in the Freight Payment process are due to inaccurate billing. But yet, it seems that there are many more people employed by carriers whose job is to collect money rather than ensure that the billing is accurate. In addition, carriers will employ Collection Agencies to resolve past due invoices. Carriers are also masking the inefficiency of their billing process.

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What these attitudes have created are inefficient and costly processes, driving high transaction costs to resolve all the inaccuracies. Wouldn’t it be wiser and ultimately less costly to pay a little more up front to improve the processes? Would companies jeopardize the quality of their product by not making the investment in technology and manpower? Clearly the answer is “NO”.

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The time has come for carriers and shippers to invest in freight settlement processes. Investments in technology, trained personnel, and attention paid to the processes will result in a more seamless and problem free environment with lower transaction costs. Plus the cost of Collection and Post Audit firms can be eliminated. “Cheap” will convert to “Cost Efficient” freight payment services.

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