Eliminating Use of Freight Payment Tolerances Can Save You Millions in Freight Spend!

If you're a Mid to Large Size Shipper, there's a BIG question you can ask your organization today. It could literally save you millions!

Does your Transportation and/or Accounts Payable team currently use Freight Payment Tolerances?

Some of you may ask what are Freight Payment Tolerances, in short these are:

Freight Payment Tolerances, also called Thresholds, are arbitrary amounts. They are set by Transportation and/or Accounts Payable Finance teams. They do this to streamline the Freight Payments process. For example, a Shipper might get a Freight Invoice from a Carrier. The total amount is within $50 or $100 of what the Shipper expected. These invoices are automatically approved and paid.

In the past, this was understandable. Investigating, emailing, and calling to resolve these discrepancies took time and resources. This cost could be as much as, or more than, just accepting these small differences.

But, as Depeche Mode would say, "Everything Counts in Large Amounts." When applied across many shipments, the losses from your freight budgets can be huge.

Many suggest that the number of these discrepancies can be over 40%. This would double each of the total potential savings amounts above!

Real Time Audit Free Freight Invoicing uses a shared ledger. It lets your Transportation and / or Accounts Payable Finance teams discontinue the use of tolerances or thresholds. They can immediately STOP this dollar leakage from your business!

Every week I speak with many Supply Chain and Transportation leaders who say this isn't a problem in their business. They don't have many disputes on their freight invoices, so it's not a problem for them.

BUT THIS IS WRONG. Most Shippers use Freight Invoice Payment Tolerances or Thresholds. This is why there don't appear to be many disputes. These Tolerances and Thresholds hide the true number of discrepancies and disputes!

The system creates invoices in real time. It does this resulting in audit free invoices. It makes them with the Shipper and Carrier via a smart contract. The system captures and updates all accessorials on the invoice. Based on the contract terms, it does this as Carrier completes the shipment. This means that we have jointly created an accurate invoice at delivery. It is 100% error-free and dispute-free. There's now No Need for Tolerances or Thresholds!

There's two logical paths you can take after reading this article.

If the above hasn't been enough to explain the size of this opportunity, call me at the number below. We can discuss until you understand.

Most importantly, if you do understand and are ready to kick the Tolerances and Thresholds habit at your company, just reach out. Then, together we can make it so!

Cheers

Jeff Ashcroft

416.990.6433

jeff.ashcroft@knnx.com

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