Quantum was having difficulty gaining access to its international freight payment data. With customers in over 100 countries, multiple currencies and cultures made it virtually impossible to capture and manage the information which is critical to controlling supply chain costs. In addition, it was difficult to pre audit the freight bills, and there was concern that the freight charges paid were not always the correct ones. Compounding the problem was the fact that the application of general ledger codes to freight invoices had to be done manually.
To resolve these issues, Quantum selected nVision Global Technology Solutions for the audit and payment of its international freight invoices. Applying the nVisionfunctionality, it was possible to build a database that would enable Quantum to verify and manage its supply chain costs and operations. Bills are audited and shipment planning and transportation provider selection have been enhanced. Also, very important from an internal perspective, nVision assisted Quantum in developing an automated general ledger coding process.
As with other nVision clients, cash flow has been improved by the demonstration of best practices in managing payment terms with transportation providers. This process is facilitated by having visibility to the details of each freight invoice, including the invoice date and the payment terms. This ensures that providers are paid on time to eliminate any potential issues like late payment fees or additional interest expense charges.
The decision to utilize nVision for freight invoice audit and payment was made by Quantum’s corporate logistics team, located in the U.S. The group responsible for processing the invoices originally was skeptical about outsourcing to a third party, but the decision turned out to be a good one. Quantum is now realizing the benefits of nVision functionality. Having access to detailed supply chain data has enhanced the decision making process.
In addition, the invoice approval process time has been significantly reduced using nVision’s web-based iResolution tool. Any invoices needing approval are automatically routed to the appropriate personnel using pre defined business rules. This automated process eliminated the previous manual process of having to scan, email or fax invoices for approval.
Quantum has a short window of time in order to meet their transportation providers’ payment terms. The visibility and transparency provided by the nVision process helps eliminate payment issues with transportation providers who sometimes hold freight due to non-payment of invoices. This can cause disruptions in supply chain networks, late payment fees, damaged supplier relationships and even more severe ramifications. See business case below.
A leading automotive manufacturer in Europe recently had a production stoppage at one of their factories due to the non-payment of invoices from one of their primary transportation providers. Deliveries were being held as collateral until the company paid their outstanding freight invoices, which totaled well into the millions.
With over 800 suppliers and no centralized process for transportation related invoices it was not unusual to experience a work stoppage according to a representative from the company. Most companies are managing hundreds or even thousands of suppliers. And while all of them are important, there are some critical ‘key’ suppliers that need to be monitored more closely.
A major freight forwarder responsible for moving materials to a production plant should fall into that category. Without the proper visibility, alert mechanism or reporting tools, it is difficult if not impossible to mitigate similar issues. Transportation providers are a key link in all supply chain networks and it is important to manage the relationship utilizing a collaborative effort when disputes arise related to late payments, invoice billing disputes or delivery issues.
nVision Global Technology Solutions is a leading freight bill, invoice audit/payment management services company, offering enterprise wide supply chain solutions. As a global business partner, nVision not only provides a prompt, accurate freight payment solution but industry – leading information management services that help clients maximize efficiencies in their supply chain.