Current invoice matching systems check on static amounts and volumes only. They simply lack the capability to match on actual performance of ordered services. For Logistics this is crucial. This is now often done by time consuming post calculation activities and roles.
What if Invoice Matching could also focus on actual performance?
An integrated approach could lead to >10% improvement on operating income!Let’s zoom in on your billing process and find out how Dynamic invoice matching adds performance control to your process.
Why Traditional Invoice Matching fails for Logistics
Shippers that outsource their logistics hand in their orders to their subcontractors based on the agreements they have in place. The subcontractor then executes their orders and sends an invoice.
On receipt of the bill, the finance employees run the invoice match and compare the invoice details with the master data of the contract. Often this is done in an ERP- or general ledger system.
Everyone happy when the invoice checks out? I wouldn’t be…and this is why:
- Those systems don’t check if the actual execution was in line with the agreed Service Level;
- as a consequence the execution steps can’t be checked on corresponding prices.
This could mean that orders are validated as being correct although the subcontractor executed the order in a completely different way, just because the data in the ERP was correct.
This is where your hidden costs are lurking!
How to add Dynamics to Invoice Matching
So how should you go about adding dynamics of order execution to your invoice matching? Not by appointing a team that reviews every single order in a sort of reverse mode. That’s why you outsourced your operation in the first place and you don’t want to re-implement this complex and labor intensive activity again at finance level.
Start using a Supply Chain Orchestration System
The way to go is to mimic your outsourcing contracts and execution processes through a Supply Chain Orchestration system.
The system will evaluate the requested execution process to the actual performance by your carrier and applied pricing data (like tariffs, dimensions, pay loads etcetera) before releasing the invoice as payable at ERP level.
This opens up a wealth of improvement and cost saving opportunities:
- Lower overall freight spend substantially;
- improve customer service levels;
- broaden customer service portfolio;
- deploy continuous improvement cycles with your subcontractors;
- improve carrier and subcontractor management;
- improve negotiation position with subcontractors;
- extend your subcontractor pool easily;
- improve carrier selection.