Nate Endicott, senior vice president growth with Enveyo, explains how third-party logistics providers are meeting the challenge of scaling billing management as their shipper customers seek to grow their fulfillment activities.

For all the many complications and concerns that shippers and 3PLs have about optimizing transportation, one theme stands out, Endicott says: “Data is king.”

“He who uses it gains a competitive advantage,” Endicott explains. Shippers and 3PLs alike are struggling to improve costs, as they confront marketplace pressures that include the prospect of high tariffs and adjustments in consumer demand in the post-COVID 19 era.

With these realizations in mind, it becomes essential for 3PLs to optimize the customer billing configuration practices. Many attempt to do it internally, possibly through a warehouse management system or finance application. In some cases, they’ll turn to freight audit providers. Typically, Endicott says, 3PLs will be billing off the rated cost instead of invoice cost. And that creates multiple reconciliation problems, causing providers to miss out on crucial margins.

Endicott recommends several best practices for optimizing the billing practice, including billing off the actual invoice on a weekly basis and moving to offering discounts off the published rate, thereby making sure that “you’re not leaving any margin on the table.”

The return on investment from a billing-management rollout is substantial, Endicott says, citing faster billing cycles, better visibility into total costs, improved cash flow, less time spent on the billing process and, in the end, increased margin.