In the dynamic world of shipping, time translates directly into money, making each minute a valuable asset. Whether you're a shipper or a third-party logistics provider (3PL), the challenge of settling shipment payments within tight deadlines can be overwhelming. The intricate process of collecting and reconciling diverse documents often leads to overpayments, a challenge successfully addressed by new AI-based solutions. AI-based providers like OpenEnvoy are able to move audits to real-time, letting companies proactively prevent overbilling rather than reactive disputes and clawbacks.
Overcoming the Overpayment Challenge
Prompt payment is paramount in today's global market, where companies are required to clear shipping invoices within a strict timeframe, typically around 72 hours from the time of loading or delivery to the port. However, the complexity of handling various documents like contracts, invoices, shipping instructions, and customs receipts within this short span often results in overpayments. This challenge affects industry giants like P&G and Unilever, dealing directly with carriers, as well as smaller enterprises who rely on spot market prices.
Traditional Freight Audit and Its Role
To combat overpayments, many companies turn to third-party freight audit firms, including industry players like Intelligent Audit and Condata. These firms meticulously review paid bills, leveraging carrier information to pinpoint overbilling instances. However, the conventional process involves filing disputes and recovering overpaid amounts, a method that takes months and impacts working capital significantly. With a 25% loss of overpayment never recovered, profitability in low-margin industries faces a substantial setback.
Real-Time Audit: Transforming the Game
Enter AI-native platforms like OpenEnvoy, challenging the traditional freight audit landscape. In contrast to the delay-prone nature of traditional audits, real-time auditing empowers shippers to identify overbilling before payment is due. This eliminates the need for extended dispute and recovery processes. OpenEnvoy's scalable solution scrutinizes various aspects of a shipping invoice, including prices, General Rate Increases (GRIs), and container locations, providing shippers with the option to rectify overbilling before payment is initiated. This proactive stance can even expedite the cargo release process, a unique advantage in the industry.
Benefits for All Stakeholders
The shift towards real-time audit isn't exclusive to shippers; it extends its benefits to companies selling freight, such as 3PLs and carriers. Verifying invoices proactively before sending them to customers allows these companies to audit disputes internally, ensuring fair and transparent resolutions.
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