4 Ways to Simplify Back-Office Exception Management with a Modern TMS
“Hindsight is 20/20.” “I wish I would have …” “If I knew then what I know now.”
Are these phrases often spoken or silently uttered in your office? It’s understandable since challenges happen every day in the chaotic world of transportation and logistics. No two days are exactly alike.
The more important question is how do you prevent yesterday’s problems from affecting today’s performance? Office teams can easily get caught up in rearview management. By using lagging indicators, people can habitually be solving the root causes of old issues. Instead of moving forward, they work backward.
Rearview management is especially risky with the velocity of the transportation industry continuing to increase. Rather than continue to dissect the past, the better approach is to build systems and processes to address problems as they occur and prevent them altogether. In the words of hockey great Wayne Gretzky, “Skate to where the puck is going, not where it’s been.”
Leveraging a modern transportation management system (TMS) is the best place to start. With it, companies can improve visibility, communication, and efficiency. Fleets that transition from outdated technology will be looking through the windshield instead of driving from the rearview mirror. Their office teams have a complete view of what is ahead along with the ability to spot and manage exceptions, as soon as they occur, to quickly resolve issues and proactively change outcomes.
To illustrate the power of a TMS for real-time, back-office exception management, let’s follow the progress of a load.
A rating engine serves as a foundational layer in a modern TMS. This core feature enables companies to store contract pricing and automatically attach the correct price to an order at the time of booking. No searching for origin-destination pairs on an outdated spreadsheet. Should a load go unrated, the back-office team can catch the issue at the time of booking rather than starting the process after delivery and creating a billing delay.
A good TMS also includes a process for issuing and accepting spot quotes. Too often the back office must wait for paper documentation or to find an ad hoc rate after the load is finalized. The right TMS creates a workflow that captures the agreed-upon rate at the time of booking and attaches the documentation to the load for accounting. With much of the work automated, the back-office team can focus their time on non-conforming transactions.
- Driver Workflows and Load Documentation
Every customer has different load requirements from unique pickup and delivery specifications to documentation needs and vehicle verification processes. Unless a driver consistently manages the same route, keeping track of each individual demand is impossible. Missing a requirement could delay billing, or much worse, create an expensive claim and lost business.
The best TMS platforms come with an integrated mobile app designed specifically for drivers. The app provides a streamlined workflow to assist drivers in completing every step required for a load. This includes easy VIN entry and documentation uploads straight from a mobile device. The information feeds back-office accounting processes for quick billing. Invoicing delays become the exception, and not the norm because the driver workflow includes a step to ensure proper documentation.
The app also helps with payroll. Drivers can clearly see when they are missing paperwork and on what load. They understand compensation will be delayed until they resolve the issue. Now the back-office payroll team fields fewer weekly settlement questions because drivers understand where they have an issue. Payroll has more time to manage true errors outside of a driver’s control.
- Accessorial Charges
Without a TMS, fleets rely on drivers and dispatchers to manually catch accessorial issues and report the additional costs to accounting. The designed-to-fail process leaves an estimated 60% of accessorial costs unreimbursed annually for the trucking industry. That equates to hundreds of millions of dollars. Even if an accessorial gets recorded, the billing team often must dispute the charge with the customer due to limited documentation or data. This delays payments and potentially creates a cash flow issue.
Small accessorial costs create big problems that ripple throughout the company.
A modern TMS catches these charges as they occur based on each customer’s contract. Truck arrival and departure times trigger detention. Canceled loads automatically prompt a truck order not used accessorial charge or modified orders create a re-consignment fee. With the company’s TMS and accounting platforms integrated, the charges attach to the load and feed directly to billing—including data supporting the fees. Fleets capture more revenue without adding any manual work to drivers, dispatchers, or the accounts receivable team.
- Financial Monitoring and Performance Management
Ask any company leader to name a major hindrance to doing their job. Outdated financial statements often come up. Receiving a profit and loss statement 30-45 days after the fact does little to drive business improvement. Yet, when the back-office team is chasing load information, manually verifying invoices, disputing billing, or fielding unnecessary payroll calls, issuing timely P&Ls becomes unfeasible—especially without adding headcount.
Using a TMS with an integrated accounting platform creates a way for information to flow between systems in real-time. The back office gains an easy way to create daily or weekly P&L statements showing business performance. Now teams have a clear picture of where the company is doing well and what needs to improve.
Dashboards and business intelligence reporting add details and insights to improve decision-making at every level of the operation. For the back office, this is especially powerful. Teams can spot data trends like increasing days payable outstanding or unissued invoices that require attention. Identifying driver payroll issues that likely will lead to turnover becomes possible. With this information, back-office staff can allocate their time and attention to issues that have the greatest benefit to the company’s bottom line.
The best path forward
Do any of these challenges represent the norm, rather than an exception, at your company? If so, what do you estimate they cost in time, money, and resources? The answer likely will surprise you.
Now is the time to get out of “rearview management mode” and start looking forward. The answers to improving business performance lie ahead. To discover how a modern TMS can simplify the back office, download a free guide, “Frictionless Freight: 5 Ways to Simplify the Back Office with a Modern TMS.”
Magnus Technologies Group is scalable enterprise-grade TMS solution, offering unlimited integration and expansion possibilities and a solid foundation of best-in-class cloud computing technologies and services. The system integrates with all major accounting platforms while also coming standard with business intelligence software for data-driven decision-making.
Whether you dispatch 50 or 5,000 trucks, the Magnus SaaS-based TMS has a full suite of features and connectivity to streamline your order-to-cash cycle in a way that maximizes business performance and growth. At Magnus, managing, minimizing, and eliminating exceptions is our norm. Contact us today.