For third party logistics companies (3PLs) service is at the core of their business. They differ from in-house warehouse operations in that while the purpose of in-house warehousing is meant to support the businesses core activity; say selling their products, 3PLs generate revenue from the service of storing and managing someone else’s inventory.
3PLs are thus very focused on finding efficiencies to help improve their profitably. Automation is a core strategy that 3PLs employ to achieve this. They readily automate receiving processes, sorting, order generation, fulfilment processes like picking and packing, carrier rate retrieval, customer communications, amongst others.
This type of automation proves advantageous for ensuring that customers are satisfied and that operations run smoothly. Yet often left out of the equation are the tracking and automation of billing within the warehouse. 3PL billing processes are still by and large still reliant on manual inputs, unreliable data, and are paper supported. Errors of computation thus result in either misbilling or lost revenue that are detrimental to the business. As a 3PL is reliant on the service aspect of warehousing and logistics it would appear imperative that billing be just as efficient as other processes so that no revenue is being lost. So, what are some practical ways automated billing can help and be supported by your WMS?
Your WMS is the key factor in beginning to automate billing. A WMS that is highly configurable will allow your business to automate your billing according to your specific business needs. So, it’s important to have a WMS that has a robust billing and financial component as part of the solution. Akatia Technologies’ WAM solution checks these boxes as it has a built in billing and finance component and since it’s on Salesforce it takes advantage of the platform’s ultra-configurability potential to be able to optimize your billing according to your business’ specific case. So, invest in a WMS that includes these types of features as it will give added value to your business and customers.
Now that we know what type of solution can help us to begin optimizing and automating billing, how can this help in a practical way? First and foremost is the ability to properly define your charges. A WMS with robust financial features will allow you to define rates and charges through price books. These price books can be universal or general charges associated to your business or can be customer specific based on customer contracts and their requirements. This provides your business with a great amount of flexibility when negotiating contracts with your customers and allows you to offer services without disrupting your organizational billing.
Once charges and rates are defined within your price books this is where the real transformation starts to take place. Within the WMS these charges can now begin to be associated to the actual inventory that you manage for your customers. How so? Let’s say for example that one of your customer’s products requires packaging our handling that is specific to the inventory. So, you create the charge within the price book and relate it to the specific product inventory, and customer. When orders come in for the product your team will go and pick the item for the order, once picked the WMS can automatically associate the packing charge to the item and customer, since it’s already known that this special packing for item must be fulfilled. Since it’s a repeatable charge the entire tracking can be automated in accordance with the fulfilment workflow. The WMS thus automatically tracks and records every time this packaging charge is repeated. This is especially efficient when scanner devices are brought in as part of the process. Since we’ve defined which customer’s inventory the charge applies to, the WMS knows which customer account to relate it to. This simplifies the billing tracking and accrual and avoids the pitfalls of having to do so by paper or through manual inputs. What’s more the charges are tracked in real-time and a time stamp is recorded providing true traceability.
As we can see the above method can then be applied to all sorts of charge tracking from storage time, handling, inventory management requirements, special materials, unique procedures, and so on. What’s more is that since your WMS is automatically tracking these charges the burden of tracking accurately is taken away from your warehouse staff and accounting department. Not only is time saved but errors are also limited, like misbilling or even lost revenue due to inaccuracies.
Furthermore, your WMS will also be able help support your invoicing. As the tasks similar to the above example take place day in day out the charges accrue and are tracked. Similar to how the price books are set up, billing cycles or periods can also be set per contractual agreements. These billing cycles can then be set and once the given cycle ends the charges for that period can be gathered and the billing lines created, and in the case of Akatia’s WAM, be invoiced directly from the WMS or else can be pushed to your accounting software package where invoicing can transpire. This type of integration of the invoicing allows invoices to be generated automatically along with the communications, as well as avoiding manual data inputs and duplication of data thus reducing tedious tasks and errors.
The benefits of billing automation are clear and as with any digital transformation it all begins with the right technology and solution to support the changes. Billing automation should be prioritized as equally as operational automation as it clearly maximizes revenue generation that improves profitability, especially for a 3PL. Billing automation will also avoid situations where previously inaccurate data and imprecise methods were used for billing practices. This will not only improve the business as a whole but also help to delight customers, which is of course the goal.
If you’re looking to transform your billing processes and inventory management, click the link below to contact us. We’d be happy to speak with you!