iTech Data Services

Freight Invoice Processing Using Machine Learning Choosing the Right Partner

Read Time: 6 minutes

Outsourcing is a popular practice, and the freight business is no exception. The majority of freight invoice processing has gotten outsourced to data collecting and data entry companies. Previously, these procedures were primarily manual, with rooms full of data entry workers pounding feverishly on computer keyboards, sometimes aided by automation such as OCR and rules-based data entry applications.

However, with the advent of Machine Learning, these bygone eras are no longer relevant. Therefore, more freight companies are adopting machine learning to facilitate their day-to-day operations.

This quick guide will serve as an introduction to how you can implement this process into your company.


Overview of Machine Learning

Machine Learning (ML) is a subdiscipline of Artificial Intelligence (AI) in which systems may learn and develop themselves by analyzing large amounts of data. More specifically, very large amounts of data can educate algorithms to construct better computer models independently; thus, traditional programming rules do not apply in this discipline.

Because of the unique characteristics of Machine Learning algorithms, they operate best with Big Data due to the volume and complexity of such data. To put it another way, Machine Learning strives to be like the human brain, which learns through observation.

Benefits of Machine Learning

Machine Learning offers a wealth of benefits, particularly for the Freight Industry. These advantages include the following:

Machine Learning Enhances its Ability to Understand Data Context and How to Treat It on a Regular Basis

Machine learning in data entry is extremely dynamic, with the capacity to re-run predicting scenarios and assist organizations in adapting to changing market situations and interpreting, constantly changing client behaviors and expectations.

Thus, freight organizations can cost-effectively enhance their productivity by extending machine learning to other company divisions and leveraging data automation.

The More that Machine Learning gets Employed, the More Likely it is to Make Increasingly Complicated Conclusions, and the Less Likely it is to Make Mistakes

Machine learning identifies and eliminates human errors, ensuring that data quality gets maintained at a high level and free of faults. Companies will save time because they will not need to devote increased time to quality check procedures because of the promptly delivered data entry procedure with the help of Machine Learning. Furthermore, the automatic data entry service will produce an accurate and consistent result because there will be no errors.

Ultimately, because the data entry operators do not have to deal with repetitive or irrelevant input, the machine learning and RPA measures will increase business efficiency.

Machine Learning Ceases Reliance on Manual Processes once it is Trained

The speed of production gets increased by allocating manual and repetitive operations to the machine. Concurrently, it aids in the elimination of manual data entry errors and duplication, resulting in optimized job quality.

Furthermore, firms will not require developers to reprogram the system every time they wish to change the internal procedure. Their platform will improve its performance and alter work processes in the organization without the need for human intervention by continuously learning data.

Machine Learning can Handle both Structured and Unstructured Data with Ease

Machine learning technology enables businesses to handle and analyze unstructured data in a timely and reliable manner.

Business reports, legal documents, and presentations frequently get printed on paper, in PDF format, or even handwritten, and some may include spreadsheets, pictures, or XML files. Notably, data doesn’t always be structured to analyze without advanced AI technology, even though text files get arranged similarly.

Such documents contain massive volumes of unstructured data that get frequently overlooked because it gets deemed too time-consuming to evaluate. However, companies can now extract important information about consumers and workers from these documents employing text analysis algorithms and use it for analytics.

Machine Learning and Freight Invoice Processing

Maintaining invoices is exceedingly difficult because of many challenges. Some of the most common issues are reconciling contract terms with the Bill of Lading (BOL), rating invoices for correct rate selection, deciding whether to accept differences in charges, and having invoices re-submitted after requiring carriers to make corrections. Companies must handle all these potentially problematic areas with utmost caution.

When these issues don’t get addressed appropriately, they may lead to errors, leading to overcharging, further increasing the total complexity of the invoice processing.

Labor costs are not the only thing that might get lost as a result of errors. Bank fees get incurred when stop payments are issued. Moreover, repeated errors like this may result in carriers offering companies less advantageous pricing.

As a result, automating a labor-intensive manual freight invoice administration process improves competitiveness. More specifically, companies may strengthen their connections with carriers, cut their days to cash, and spend less on their back-office using automation, resulting in a more lucrative firm.

Moreover, freight companies can take advantage of the following ML features:

  • The ML component gets linked with an OCR component that allows it to read and comprehend the context of freight bills;
  • ML has gotten trained to distinguish carrier variances and retrieve data for payment and audit purposes;
  • ML has learned how to apply client rules in conjunction with certain carriers; and
  • ML has learned to apply contract-specific rules and payment inconsistencies that get frequently discovered during freight audit.

Choosing the Right ML Partner

For starters, businesses should seek a partner who has a track record of using Machine Learning to process Freight Invoices and Bills of Lading (BOLs). Consider Machine Learning to be an artificial brain, which is what it is. The more companies that use that brain to do a specific purpose, the better it gets.

A Machine Learning device that has gotten trained to use its brain will perform considerably better. It should be built expressly for this purpose and subjected to hundreds of millions of freight invoices. Companies will see that their algorithm has grown to apply layers of context to them in this way. Moreover, it will have grown smarter on its own and will continue to look for better, faster ways to accomplish this task.

Ultimately, it should not be necessary for businesses to create something that will work; rather, it should already exist. Companies will reap the benefits of outsourcing this as a service at a very reasonable cost and with no setup or implementation charges if they do so.

In more detail, companies must consider the following when looking for the right partner:

To begin, learn about their experience with freight invoices.

The potential of receiving substandard work is a major objection leveled against outsourcing. Outsource providers exist in different kinds and sizes, and finding the appropriate one requires knowing what information to look for in potential candidates. Companies might begin by tapping into their existing contacts and soliciting recommendations from individuals they know and trust.

Furthermore, before partnering with a supplier, organizations must ensure that what they require and what the provider specializes in are a great match so that the provider’s capabilities align with the company’s objectives. Companies must hire a respectable firm that is well-known in their industry and has a track record of working on projects comparable to theirs.

The selection procedure may well be time-consuming and difficult. But, companies must ensure that their job descriptions are crystal clear to avoid attracting a large number of underqualified applicants. They must clearly define their main performance measures, objectives, and expectations. They must also know and gauge how good their partner’s skills are and whether they comprehend the business, best practices, and current technological trends.

Second, find out what processes the Machine Learning in Freight Invoice Processing partner uses.

Machine Learning in Freight Invoice Processing encompasses several processes, such as the following:

Client Indexing

As soon as invoices are uploaded, a Machine Learning paired indexing process — a process that takes only a few seconds and requires very little human participation — organizes them. After that, invoices are categorized by carrier and client, allowing for the application of client-specific Machine Learning rules and the creation of incredibly accurate data outputs.

Carrier Classification

It is critical that the shipper assigns the correct class number to the BOL and labels it appropriately.

Keep in mind that the NMFTA’s classifications are subject to change. This change is common in response to market fluctuations, and it might leave shippers perplexed about the total cost of their package.

Machine learning gets used to enter and process data to establish a shipment’s current freight class. Before the carrier leaves with the package, the shipper must document the goods with the appropriate NMFC number on a Bill of Lading.

When the wrong class gets recorded on the BOL, major complications can arise, such as the freight being unsuitable for the carrier’s storage space, weight constraints, and specific equipment, resulting in fines and other penalties.

Invoice Data Extraction

Machine learning follows the same principles when it comes to extracting invoice data. Data extraction software must get trained with big data sets since machine learning algorithms rely on data sets to comprehend the relationships and classification of data to get extracted.

Simply said, this data consists of questions and probable answers so that the machine learning algorithm may examine the problem, its solution and learn to respond appropriately when a similar situation arises.

Making a plan to execute the process, or creating a structured execution plan, is the first and most critical step in automating the invoice data extraction process. This work requires deciding on two major areas:

  • Where will the inputs originate from?
  • What is the decision for the output format?

Applying Client Carrier Rules

Aside from these basic responsibilities, a Machine Learning solution for invoice processing can execute additional functions in the same way as a human would. Cross-checking invoices, purchasing orders and inventory, screening for duplicate invoices, and implementing client carrier regulations are just a few examples.


As AI for invoice processing evolves to include more capabilities, including such features as fraud detection, forecasting spending trends, and auditing expenditure, the possibilities for using Machine Learning for Freight Invoice Processing will increasingly appear to be limitless.

Ultimately, Machine Learning can help the Freight Industry grow and flourish in various ways, from clearing invoice payments and sorting them according to internal criteria to detecting financial and insolvency risks by looking at the balance.

Subscribe to our blog for the latest industry trends

    Reach out to our team today!

    IDS Commander iTech2021