Accounting visibility is a term that can get thrown around a lot when it comes to logistics service providers. Within the modern-day shipping network and supply chain, one area that becomes overlooked is the back-office processes that take place daily. It may not be as exciting as dealing with customers directly and managing the actual transportation process. However, these are critical steps and roles that management must maintain, and analytics and collaborative IT infrastructure are creating a new way to unlock more value. Regardless, many organizations still lack visibility into their back-office accounts payable and receivable processes as a whole. This is especially true for accounting and financial planning, so accounting visibility is essential for the supply chain network today, including the full way in which it affects all operations.
The High Costs of Poor Accounting Visibility
Freight management accounts for a large percentage of the supply chain operation focus. According to TheSupplyChainJournal, account management and financial planning are just some of the many moving parts that must work in unison within the supply chain. While all network parts are vital, one of the most critical remains financial planning and management through accounting visibility. Billing and invoicing can be quite a costly component of day-to-day operations. As such, they need to be maintained and monitored to cut back waste, reduce frivolous spending, and lower fees and overhead expenses. Having good visibility into where the money is going and watching both income and expenses in real-time will allow management to adjust and respond to problems as needed quickly.
Visibility Into Back-Office Finances Leads Better Cashflow Management and Better Network Relationships
Having a clear picture of what happens within the back-office’s normal operations is possible with accounting visibility. Having this insight can help management better prioritize operations to reach higher levels of efficiency.
For instance, knowing how ROIs are shaping up, what predictive financing projects look like, how the actual budget is stacking up and projected income versus expenses reports can help everything run more effectively. Having such insights with accounting visibility can improve cash flow, boost 3PL partnerships, keep consumers satisfied, boost team member productivity, and provide operational efficiency within various markets.
Monitoring the major and minor financial players can help logistics managers and supply chain directors improve financial stability and confidence. Moreover, the standard workflows within accounting can lead to a few other core advantages in the supply chain that go well beyond the four physical walls of your enterprise.
Additional Benefits of More Visibility Within Accounting
Maintaining high levels of adequate accounting visibility can bring numerous benefits that can be seen and felt throughout the supply chain. Improving accounting and financial planning throughout the network can have a lasting and positive impact in the following ways:
- Increased invoicing accuracy. Better planning, foresight, and monitoring ensure greater accuracy and faster response to disruptions or complaints when they arise. That includes tracking the full shipment lifecycle from invoicing through payment status as part of the accounts payable process.
- Automated invoice management. Delegating routine and mundane tasks associated with records and paperwork can free up team members to focus on more critical tasks throughout accounts receivables. Consider this – the invoice and documents are shared with shippers, and the customer can then make appropriate payments for the freight, while the carrier can record customer payments without necessarily sharing that information with the shipper. Essentially, everyone that needs to be involved can share the invoice, review the data associated with it, such as an eBOL or ePOD, and determine whether to accept such an invoice.
- Intuitive reporting designed for on-demand or regular use. Customizing reports and data makes it easier to share critical information through real-time freight analytics. Again, this tracks back to the need to improve the full flow of money and data between accounts payable and accounts receivable.
- Faster payment processing. Accounting visibility helps streamline the overall process of payment negotiation and finalization by highlighting potential problems earlier than usual. After all, it’s always better to know what you pay for before actually submitting payment and enduring a lengthy recovery process.
- Saving money by eliminating the hassle of submitting payments manually. Ultimately, automated methods throughout the process, reducing the number of clicks and manual interventions necessary to process an invoice or even create an invoice for a trading partner, make everything faster and more accurate to save time for everyone.
Lower Back-Office Costs With Visibility in All Accounting Through Analytics
The importance of accurate and robust insight into the financial health of the supply chain is never overstated. Visibility is essential for management and particularly so for the financial components of the modern-day supply chain network. Maintaining proper accounting visibility will keep everything running smoothly, boost profits, lower expenses, and improve overall shipping success. And it all begins with the right analytics and automated setup that is implemented and utilized. Contact Turvo to learn more about how your organization can improve accounting visibility and promote an increased back-office in one step.