logisticstechoutlook

A Guide to Choosing a Payment Services Provider

Logistics Tech Outlook | Wednesday, September 21, 2022

Global supply chains must take full advantage of all the latest shipping technologies.

FREMONT, CA: Freight payment is a collection of services that function similarly to a general accounts payable service for numerous accounts and invoices for shippers. Payment and financial service providers act as intermediaries between shippers and carriers by receiving, processing, and paying invoices. Freight audit and payment service is another name for freight payment service. The ultimate purpose of all related services is to assist shippers and carriers in managing large volumes of freight invoices, maintaining a high level of business intelligence regarding cost management, and fostering stronger relationships between shippers and carriers to promote business growth for both parties.

Payment service providers, also known as freight payment service providers, are third parties that offer merchants assistance in streamlining the acceptance and management of invoice payments. The utilization of a freight audit and payment vendor is widespread among U.S. shippers. With transportation accounting for a significant portion of logistics costs, outsourcing payment services has become more prevalent. As more shippers outsource their bill payment and freight audit services, keeping a few guidelines when selecting a freight audit and payment vendor is important. Shippers should also consider their transportation network strategy when determining how a freight payment processing solution will optimize their efforts. Before making a final selection of a payment services partner, they must consider the following:

Knowledge of all modes of transportation: If a separate auditing provider is required for each shipment mode, the purpose of having an auditing provider is defeated. Logistics companies must ensure that their auditing and payment solutions provider can aggregate and import data from all modes and systems, including parcels.

Intuitive Auditing processes all data based on predefined variances and rulesets: Clearly defined services and expectations for shippers and carriers ensure that everyone knows what to expect and their responsibilities in every situation. This also serves as the foundation for reporting and performance management, allowing the team to manage by exception and avoid losses caused by data delays or misunderstandings.

Continuous improvement focusing on long-term objectives: Look for a freight auditor who will audit and pay bills and suggest new strategies to help organizations achieve their long-term goals.

Dashboards and filtering capabilities for sorting data by SKU, lane, zone, and other granularities: A provider of technology that provides visibility into every aspect of transportation expenditures enables organizations to compare and analyze long-term data points and historical trends rapidly. In addition, these insights lead to a more practical approach to carrier selection strategies, as companies will know when to use zone skipping, hub injection, and alternative fulfillment methods to reduce costs.

The detection and correction of data anomalies: Early detection of data anomalies, such as missing ZIP codes for specific regions and other discrepancies, makes it easier to mitigate them and enables quicker responses and enhanced collaboration among stakeholders. In addition, data anomaly detection and correction ensure that the subsequent process steps, normalization, and analysis, proceed without hiccups.

Data normalization for accurate comparisons: It is useless to collect data if logistics companies cannot properly analyze and apply it, so auditing and examination are essential for data normalization and application. Most systems were not designed initially to compare across systems, so normalizing the data into a standard format ensures that everything can be approximated efficiently and effectively.

Actionable insights that aid in optimizing carrier selection and reducing overall expenditures: Using real-time data and insights can assist shippers in planning and preparing for similar situations in the future to increase efficiency and reduce the likelihood of repeat errors and mistakes. In addition, actionable insights should be automated, with push notifications alerting users of deviations from target KPIs to prompt intervention. Modern shipping and freight management often require manual review or intervention, even when automation is available.

Secure settlement and payment processing through a bank: Strong financial backing provides any shipper with a competitive edge, particularly in tight economies and volatile markets. It reduces the credit risk associated with shipping to new and emerging markets and working with new brokerages and 3PLs.

Weekly Brief

Read Also