The Time for AR Automation for Transportation and Trucking is Now!
The trucking and transportation industry is the lifeblood of our U.S. economy. According to the American Trucking Associations, trucks, for example, moved roughly 72.5% of the nation's freight by weight and $732.2 billion in gross freight revenue in 2020. Most of the country experienced the shortage of supplies that occurred during the first year of the pandemic. When there are problems in the transportation industry, the country feels it.
As ERP (Enterprise Resource Planning) consultants, we help companies solve many types of supply chain issues. One area of expertise at our firm is helping the trucking and transportation companies implement distribution solutions. Specifically, we offer solutions like Collect-IT for Trucking and Transportation to manage the complexities around accounts receivable collection.
Learn How collect-IT for Transportation Helped IMC Companies Get Paid on Time Every Time
Managing Deadlines to Get Paid
In a normal business climate, you deliver on time, so you should get paid on time. In challenging times, when you cannot deliver on time, it is even harder to collect invoices for payments. If you're like many transportation companies, you will probably have to expedite delivery times once the supply pipeline opens up. This adds to the burden on your business and your staff and makes it a struggle to be profitable. While the availability of supplies and deliveries may be out of your control, you can do something to improve your collections.
AR Challenges and Complexities
Manage Payment Delays
One unfortunate result of the ongoing pandemic is that payment cycles and Days Sales Outstanding (DSO) increased. As accounts receivable collect times increase, accounting personnel spend more time reissuing invoices, sending out statements, emailing reminders, and following up on outstanding invoices. Multiply these activities across the $600 million or so in annual revenues that the typical trucking firm brings in, and manhours add up quickly.
Multiple Contracts and Invoices
Transportation firms typically have contracts with multiple subsidiaries of the same parent company such as Walmart and Sam’s Club, for example. It is common for one delivery to have multiple invoices that need to be sent to different recipients. Each recipient may have different payment terms, invoicing requirements, and contract terms. All of these transactions must be tracked into the company’s billing system. If these processes are manual, it is very time-consuming.
Additional Custom Requirements
Other customizations include contract pricing (which may vary according to customer), statement requirements, and the need for documentation (e.g., proof of delivery or bill of lading). If an invoice approver does not have the documentation for a specific detention or demurrage fee, for example, that invoice may be rejected, thus creating an even longer pay cycle.
The Solution: collect-IT for Transportation
Right now, trucking companies and transportation firms are getting their cash flow squeezed thanks to longer payment cycles. Their days sales outstanding (DSO) are increasing, AR turnover is decreasing, and some of their largest customers are basically using them as banks. Collections, a process usually managed by a handful of accounting clerks that have other responsibilities, takes more time, effort, and manpower to manage.
collect-IT for Transportation enables you to:
- Get paid quicker with Dispute Resolution and Payment Plan
- Easy access to shipping documents, invoices, and statements
- Customize communications based on the type of invoice (per diem), amount, and customer to increase cashflow
- Automate communications with built-in workflows for sending out reminders and dunning letters
- Create notes on invoices and customer records
- Empower your reps to work on national accounts and parent/child invoices across multiple companies on the same call
- Send statements and associated invoices on demand
To learn more about how collect-IT can help your company achieve these and other goals, download Dynavistics’ eBook. We lay everything out for you, give you the call scripts you need to rev up your cash generation efforts. Email template samples are provided for reminder and dunning letters. We help you with the complete strategy and help you work toward getting paid on time, every time.
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