Outsourced Freight Payment and Invoice Processing for Freight Brokers
iTech Data Services

Outsourced Freight Payment and Invoice Processing for Freight Brokers

20May
Read Time: 3 minutes

Freight brokers play an important role in the logistics industry, serving as an intermediary between shippers with freight to move and the carriers that transport freight from point A to point B. The very nature of a freight brokerage’s work involves lots of moving parts, so to speak. This prompts many freight brokers to search out freight payment and freight invoice processing outsourcing partners in an effort to eliminate a few of those moving parts from the equation.

A reliable freight audit and freight payment company can oversee a brokerage’s invoicing and auditing tasks, freeing the organization’s in-house staff to focus on other high-level tasks. This isn’t the only benefit though; freight brokers can expect to see improved efficiency and cost savings, among other things.

What Does a Freight Payment and Invoice Processing Company Do?

When serving a carrier or shipper, a freight audit and payment company will typically handle the shipping and freight bill capture, in addition to any other data capture and payment needs. Notably, it is the carrier that typically manages a shipment from its origin to its destination.

Brokers go a step further, also overseeing a shipment from origin to destination. Beyond this, they also:

  • Pay the carrier on behalf of the freight broker;
  • Manage data that must be captured and retained; and
  • Send out invoices to the shipper.

The latter billing step is most commonly outsourced, with brokers enjoying improved accuracy and speed, amongst other advantages. It is common for a freight payment and invoicing processor to review and audit a number of different documents for accuracy, including the following:

  • Lumper Receipts;
  • Driver Work Receipts;
  • Proof of Delivery (POD) Documents;
  • Bill of Lading (BOL); and
  • Rate Confirmations.

The precise nature of the document will determine how the service provider audits and evaluates it for accuracy. Generally speaking, though, the outsourcing partner will confirm each document against the carrier’s initial quotation. Once the information is verified, the carrier will be paid and the invoice is created and submitted to the shipper.

What Matters Most When Outsourcing Freight Broker Invoice and Payment Processing

There are a few different factors that freight brokers must emphasize as they seek out an outsourcing partner to handle their freight invoice and freight payment processes. These key considerations include:

  • Accuracy;
  • Speed; and
  • Cost Effectiveness.

Freight payment and invoice processing accuracy is extremely important. This is true from a practical perspective — nobody wants to be shorted, nor does anyone want to overpay — but also from a professional perspective. Errors come off as unprofessional and they bring into question a freight broker’s professionalism. One might surmise that if a brokerage cannot handle a simple invoice correctly, they may be hard-pressed to handle the transport of valuable cargo. That’s a damaging assumption. Plus, it’s unprofessional and downright awkward to find yourself in a position where you need to admit to an error.

Freight invoice and payment processing must be performed in a timely manner too. Speed matters in the logistics industry and delays can be very damaging to a freight broker’s professional relationships in the 3PL industry. The same is also true of errors and accuracy problems; they negatively affect relationships, causing harm to a freight broker’s bottom line.

Cost effectiveness is another key consideration. Speed and accuracy are two primary factors affecting cost effectiveness. It’s all interconnected. Outsourcing partners who offer freight payment and invoice processing for freight brokers really need a fair amount of experience in this industry to deliver cost effective results. The highly specialized nature of freight billing demands attention to detail and knowledge of the many moving parts in a freight broker’s processes. Without this insight and an eye for accuracy, rapid turnaround times are impossible. This can lead to a scenario where the per-invoice cost is actually lower when performed in-house. That’s kind of the opposite of cost effective; it cancels out the financial savings that motivates many freight brokers to seek an outsourcing partner in the first place.

Freight brokers are the experts when it comes to getting cargo from point A to point B. They’re adept at coordinating freight movements from origin to destination — a process that comes with numerous challenges and complexities. It only makes sense to offload and delegate whenever possible, especially when you can achieve cost savings. Outsourcing freight payment and invoice processing can be an effective strategy that benefits a freight brokerage’s bottom line.

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.


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