Productivity unleashed: Speeding up your invoice to collection cycle

Looking to unlock productivity gains that can keep you one step ahead of your customers’ expectations, and your competitors too?   

We’re kicking off a new series highlighting some of the many ways technology can help you optimize your logistics operations, now and in the future.  

We caught up with Imraan Khan, Product Portfolio Manager of our powerful accounting solution in CargoWise. Imraan leads a global team developing industry-leading technology to automate and enhance our customers’ accounting capabilities, all from a single logistics operations platform.   

From minimizing late payments to improving cash collection, Imraan shares his thoughts on why a deeply integrated billing and invoice collection engine is one of the secrets to supply chain success in 2022.   

Imraan, let’s start with late payments. They remain a major pain point for the industry, but are sometimes simply due to avoidable compliance or administrative problems. What’s going on?  

Logistics companies – like most organizations – are very focused on reducing the volume and complexity of late payments.  And like you mentioned, there are several factors that can influence this process and ultimately, lead to an inconsistent or inaccurate invoicing experience for customers.   

When thinking about late payments, here's some things I’d encourage logistics leaders to consider.

Firstly, can your accounts team receipt payments correctly, so that a receivables person knows what the customer is paying? Your customers can provide all manner of references to explain the invoices they are paying, and of course the system of record that holds all these references is the actual operations platform.  

Secondly, can your collections team rely on the invoice being correct? And are they able to answer a customer’s questions on the spot, and secure payment faster?  

In many instances, they may have to wait for the operations team to come back to them with the information requested by the customer, because they can’t access the data they need from your disparate systems. 

There’s a lot that can go wrong, which is why I think taking an integrated approach to your operational and financial systems can be so powerful.   
  

Your point here reflects what a lot of our customers are telling us. Specifically, that having the status of an invoice visible to both operations and accounts staff on the one platform is very important. Can you explain why?  

I know the team recently spoke to Sushil Gupta, who’s the Group Chairman of Atlas Shipping, a customer of ours and whose business is one of India’s largest freight forwarders.   

During this discussion, Sushil talked in some detail about how having a single logistics operations platform helped streamline their end-to-end billing process, enabling them to send out more accurate and on-time invoices, without the need for manual intervention.   

In fact, he even called the accounting solution in CargoWise the “backbone of their operations”, which – while perhaps I’m a little biased – is a great reflection of the depth and breadth of the functionality we offer.   

If you think about it, because two teams are responsible for invoicing and collecting invoices, using different systems makes it harder to manage collections, so all relevant information is not readily available to the receivables team.   

For example, your collections team might be asked questions about why they were charged certain amounts, while they are on the phone to a customer and trying to collect an invoice.  

If you’re relying on two disconnected systems, the best response they can provide is that they’ll have to investigate it further and get back to them. In a single system, your collections team has a much better chance of answering the customer and securing the payment there and then.   

Integrated credit control functionality via one platform can also be very powerful when it comes to working with customers who potentially have credit issues.   If your customer has a credit problem, a single system will allow you to quickly decide whether they should proceed with the work and request payment from the customer.  

Two disconnected systems make this much harder because you can’t judge whether the credit issue is a payment problem, or just a big increase in business that this customer is bringing to you.  

In fact, sometimes, by the time you realize there’s an issue, the customer has either exceeded their credit limit with you, or they’ve taken their business elsewhere due to slow decision making. Single systems, with data at your fingertips, accelerate these critical processes.  

Cash flow is critical for logistics companies, and it has become even more unpredictable because of the pandemic. How can accounting teams use technology to leave behind outdated, manual processes and get better control of cash flow reporting?  

A strong business requires a positive cash flow to continue growth, which in turn requires close monitoring of every stage of business development. This could include focusing on working capital or liquidity management as part of your short-term cash analysis, or perhaps you’re looking at a longer-term analysis to make future growth plans.   

For example, accurate, long-term forecasting based on integrated historical operational job volume data, invoicing and payments data, can provide clarity on where to invest next, what parts of the business can be grown, and perhaps what needs further attention.   

Using an external third-party accounting system can lead to inaccessible data – adding to the pressure of producing these reports on demand – and manual workarounds often lead to inefficient processes and potential errors in your reporting.   

Technology, such as CargoWise, gives you the flexibility to configure your cash flow and associated reports to meet your company operations and accounting requirements.   

Take for example the comprehensive data and reporting capabilities in CargoWise. Not only does it help you forecast your future revenues – such as historical operations data and invoicing or revenue data – but it also provides cost data that will let you forecast future net revenues and net cash flows, including overhead costs and time to payment information.   

When using two disparate systems, an analyst would need to blend at least two disparate sets of data to even begin to answer the question of future cash flow predictions. Whereas having all this data within CargoWise accelerates the analysis process, and reduces the risk of incorrect data.  

Want to stay productive and profitable with customizable accounting tools in CargoWise? Learn more