iTech Data Services

How to Select the Best Outsourcing Partner in a Crowded Freight Audit and Payment Space

Read Time: 5 minutes

Third-party logistics (3PL) is a complex business sector, with a myriad of companies offering freight audit and payment solutions to businesses that wish to outsource. These 3PL freight audit and payment platforms have a number of unique traits due to the intensive demands of this particular industry. This results in an added layer of complexity that makes it even more challenging for freight brokers and shippers who are in search of the right software solution. Fortunately, there are a few strategies that can be employed to find the best 3PL payment portal and freight auditing platform for your needs.


Size Matters When Seeking 3PL Freight Audit and Payment Solutions

The size of a business can have a significant impact on the search for a 3PL software platform.

Smaller companies that opt to outsource their third-party logistics freight audit and payment solutions may confront challenges. For instance, the level of service could be less — or even subpar — in cases where a service provider works with larger organizations. When a service provider focuses on the clients who “pay the bills,” their “smaller” clients may see an adverse impact. For this reason, it is prudent to investigate a service provider’s reputation amongst their clients, with a focus on companies that are comparable in size to your own.

Scalability is also a concern for smaller companies that do not intend to remain small businesses forevermore. You want to be certain that your outsourcing partner has the ability to support your company’s growth and expansion well into the future.

Larger freight brokers and shipping companies face challenges too as they select a 3PL payment and freight auditing outsourcing partner. First and foremost, an outsourcing partner must be capable of handling the demands of big business. Not every service provider is equipped to meet the needs of high-volume shippers and freight brokers, while others may not be able to accommodate future growth.

These larger companies also risk damage to their brand identity and their reputation within the marketplace if they choose the wrong outsourcing partner. This underscores the importance of researching a service provider’s reputation within the industry.

Considerations for Choosing a 3PL Freight Audit and Payment Software Outsourcing Partner

Are you ready to select a partner for outsourcing freight audit and payment functions? If so, you ought to consider the following points before you sign the contract.

Service Quality – Service quality is perhaps the single most important consideration; it’s also among the most difficult factors to evaluate. Data capture is a key trait to examine when evaluating quality. All pertinent data — including payments and discounts — must be captured and retained in high-resolution. Generally speaking, the more data you capture and retain, the better. Remember to enquire about data storage timeframes too because some service providers may discard data after a certain period of time has elapsed. In this case, you would need to export the data periodically if you wish to retain it indefinitely.

Turnaround Times – Rapid turnaround times are a must in the world of third-party logistics. A delay in any part of the freight auditing and payment processes leads to a trickle-down effect that extends all the way to the parcel recipient. This is a recipe for a negative experience — one that can result in the loss of a customer.

Speed is critical in this industry and carriers expect timely payments. Those payments also need to be accurate. A missed payment deadline or a short payment can lead to loss of a valuable discount, or worse, damage to a shipping carrier’s relationships. It is vital that your outsourcing partner understands what is at stake. You should be confident knowing that your outsourcing partner is doing everything possible to ensure both speed and accuracy, resulting in a zippy turnaround for those payments and freight auditing services. Turnaround time and accounts payable (AP) accuracy are important points of discussion if you choose to speak with references before you sign a contract.

Cost – Cost is usually a key motivator for third-party logistics companies seeking to outsource payment and freight auditing processes. While cost is certainly important, there is truth to the old adage, “you get what you pay for.” You may save a few dollars on your bill, but those savings may come at the cost of sluggish turnaround times, errors or a lack of data capture. Ultimately, it is service quality and speed that will determine the actual cost of an outsourced freight audit and payment solution.

Evaluating 3PL Freight Audit and Payment Software Outsourcing Partners

Once you have the three aforementioned considerations in mind — service quality, turnaround time and cost — you’re tasked with evaluating prospective outsourcing partners. Here are a few points to examine.

  • Resource Commitment and Deliverables – What resources and deliverables will they be including in their service-level agreement (SLA)? You must have a clear concept of exactly what services you are getting, along with information concerning when those services will be rendered and the precise terms for the working relationship. Deliverables and resources must be easily quantifiable.
  • Knowledge and Experience – How well does the prospective outsourcing partner know the 3PL industry? Is the outsourcing partner familiar with the unique and specific needs of shippers and carriers? How long have they been working with clients in the third-party logistics space? Their answers to these questions will provide a great deal of insight. Additionally, they should be willing and able to provide references whom you can speak with; ideally, those references will include third-party logistics companies.
  • Process – The best freight audit and payment outsourcing partners have a defined, systematic process that guides their work. Ask them to describe that process. Ideally, they should be using innovative, next-level technologies such as machine learning (ML).
  • Transparency – Transparency is an essential part of your relationship with an outsourcing partner. You will gain a great deal of insight into the service provider’s overall willingness to be transparent as you inquire about the aforementioned points. But beyond this, you must be confident that they will provide insight into the status of your work, both at the micro and macro levels. For instance, if you need to track a specific invoice, what level of effort would be required? Is there a process in place?

Today’s most successful and efficient 3PL payment and freight auditing service providers leverage the latest technology. But not all AP automation technology is created equal. In fact, you should plan on spending a fair amount of time researching prospective partners for outsourcing accounts payable and freight auditing services and the technology they’re utilizing. At iTech, we specialize in today’s most in-demand and emerging technologies, including machine learning and its uses in the 3PL industry. Contact the iTech team today to discuss your 3PL outsourcing needs.

Subscribe to our blog for the latest industry trends

    Reach out to our team today!

    IDS Commander iTech2021