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Top Automation Trends in 3PL Freight Invoice Processing and Auditing

15Dec
Read Time: 6 minutes

Freight invoice processing and freight bill auditing are complex, detail-oriented tasks, leading to significant challenges as shipping and logistics companies attempt to handle everything in-house.

The primary goals for processing freight invoices and performing freight invoice audits are three-fold. Firstly, there’s accuracy — a goal that often takes a hit as a result of inevitable human error.

Secondly, there’s speed. Processing freight invoices and performing freight invoice audits in a timely manner can be challenging due to the many complexities. What’s more, the relatively high incidence of human error can result in setbacks further down the line.

The third objective for freight invoice processing and auditing is cost-effectiveness. Many companies struggle with cost-effectiveness simply due to the amount of time it takes for a human to manually perform many of the tasks associated with freight invoice audits and other aspects of freight bill processing. For this reason, many find it is advantageous and far more cost-effective to outsource invoice processing services to a third party. The top service providers use sophisticated freight invoice processing software platforms that expedite the task while eliminating human error from the equation. The result is a cost-effective and highly accurate freight bill and audit, performed on time.

Advances in Freight Invoice Processing and Freight Bill Auditing

The three aforementioned goals commonly lead the pack because the 3PL company must ensure that they are paying the proper fee to the freight carrier, while the carrier must be able to proceed with confidence knowing the same. It’s all about protecting that bottom line. If there are any omissions, errors, or delays in freight invoice auditing and processing, the consequences can be costly. This has largely driven the development and implementation of new technologies and software in the 3PL space.

This may prompt the question: what are the latest trends in freight invoice payments, invoicing, and auditing? Many are opting to outsource invoice processing and freight invoice auditing tasks to service providers that are leveraging innovative technology, driven by innovations such as Machine Learning.

Here is a look at how automation technologies are transforming the 3PL freight invoice processing and auditing space.

Machine Learning Enhanced Intelligent Character Recognition for Invoices and BOLs

Machine Learning (ML) enhanced Optical Character Recognition (OCR) technology is used for both paper and paperless freight invoice processing tasks such as data capture. A much more advanced relative of simple optical character recognition, ML-enhanced OCR software uses algorithms to add context to captured data. While there are many applications for this technology its core functions make it perfect for applying to the processing of BOLs and freight invoices.

ML-enhanced OCR not only extracts characters it evaluates, and understands the information using the context of the surrounding data. For example, with OCR technology, you can apply simplistic rules based on the location of data. If a PO date is always in the upper right-hand corner of a page, you can instruct the OCR output to always treat that corner as a date; all characters must be numeric and in date format. This is great if every form you receive has the same structure.

With BOLs and freight invoices, we know that uniformity is very uncommon. These forms are varied and — for the most part — unstructured. Therefore you need someone or something “smart” to extract information with a high degree of accuracy. Given the same task of “extract the PO Date,” machine learning software will accurately locate and extract that data from any location on the form. This allows for efficient data capture regardless of document layout.

ML-enhanced OCR is relatively new to most organizations, which are performing these tasks either in-house or on an outsourced basis. Lots of these companies still use people to sit and review their freight invoices and BOLs. After all, you can provide a human employee instruction on what data needs to be captured and how that data ought to be treated, and — with proper training — they will get the job done. They will be capable of locating the PO date from the above examples and they will process it. But there are some limitations.

  • Human error is always a possibility. This can take many forms and it may be as simple as an errant mouse click or the tap of the wrong numeral key. But the consequences can be significant and the impacts can extend far downstream.
  • Training costs can be significant, especially if you are expecting staff to oversee a large data capture project or are expecting them to perform complex data handling tasks with raw unstructured data or data sets with unique properties.
  • Attrition is a sad reality for this sort of work, with well-trained workers gradually becoming less efficient, and ultimately, they move on to the next chapter of their careers. 3PL data capture can be tedious and repetitive, yet it requires intense focus on the human’s part. It’s a combination that weighs on the mind in a very unhealthy way, resulting in reduced productivity and a higher incidence of human error.
  • Working hours represent a limiter to your ability to capture data with machine learning-enhanced OCR technology. Data capture and other data processing tasks occur only during working hours when human intervention is involved. This limits the amount of ground you can cover, whether you are reviewing a BOL, capturing data from freight invoices, or performing freight bill auditing.
  • Scalability is greatly limited when human intervention is required. This is true of all data management and data handling tasks. Up-scaling is time-consuming and costly since it entails new hires. Down-scaling is equally challenging because company leaders are confronted with the task of firing well-trained employees. It is possible to hire contractors on an as-needed basis, but this has its downside since training is required. Outsourcing is typically the best solution.

ML OCR software can perform the same tasks that a human would perform in less time, with higher degrees of accuracy, for less cost, without scalability issues, and it can do so on a 24/7 basis. In short, machine learning OCR software can overcome all of the major obstacles and challenges that humans encounter when performing data capture on freight invoices and other 3PL documents.

As with a human, ML OCR uses a form’s context to gain an “understanding” of what to look for and what to do once that data is located. Its algorithms are taught to locate, comprehend and output each data component — even handwritten information. ML technology is designed to learn on its own to become even more efficient and productive. It does so through the repeated performance of a particular task. As it works over time, the algorithm is adjusted to perform at a higher level. For context, think of the way a person gains experience and knowledge throughout their career. That insight is applied to the individual’s work, resulting in improvements over time. The primary difference is that ML OCR is far more accurate and thousands of times faster.

Machine learning technology makes this 3PL software extremely beneficial and effective for automating elements of the freight shipping and logistics processes — a key goal for 3PL companies that strive to better their bottom line.

Robotic Process Automation for Freight Invoice Auditing

Freight invoice auditing is a mission-critical task in the third-party logistics space. 3PL freight invoice auditing serves as a highly efficient strategy for ensuring that a shipping and logistics company’s operations are running at maximum efficiency. Freight bill audits have gradually shifted from an optional, “nice to do” task to an essential “must-do” as companies have become increasingly cognizant of their bottom line. Audits ensure that freight is moved cost-effectively, with on-time arrivals and accurate freight bill charges.

Robotic process automation or RPA is a technology that’s transforming the freight invoice auditing process. A robot can be programmed to perform everything from lookups to accuracy checks. They can even apply discounts and correct anomalies or irregularities. And this is all performed in a matter of seconds, resulting in tremendous productivity. RPA freight bill processing is very efficient both in terms of time and accuracy.

RPA freight invoice auditing can be used to perform tasks that — until recently — could only be performed by a human. It’s hard to argue the claim that RPA freight bill audits far surpass what a human can achieve in terms of accuracy, speed, scalability, and cost.

To err is to be human and thus, human error is always a possibility when people are involved. It’s unavoidable. RPA technology never errs, although it is certainly possible for RPA software to perform freight bill audits badly as a result of bad programming. But that ultimately comes back to the human developer, not the technology.

Speed is an undeniable advantage of RPA freight invoice auditing. It’s simply impossible for a human to match a robot’s speed. What’s more, RPA is not limited to an 8-hour workday. RPA freight invoice auditing can be performed around the clock, resulting in unparalleled productivity. And it’s all done with perfect accuracy; there’s no risk of encountering a bleary-eyed robot who’s making mistake after mistake because they’re overtired and overworked.

There are numerous benefits to using robotic process automation for freight invoice auditing, but deploying this technology in-house can be costly and at times, impractical. But this is an instance where it can be advantageous to outsource freight invoice auditing, along with other 3PL data-related tasks such as freight bill processing.

Automation trends in freight invoice processing and auditing have revolutionized the industry. Many companies in the 3PL space can benefit from hiring a freight invoice processing outsourcing partner. 3PL outsourcing companies such as iTech can bring the latest, most innovative technologies to the table, allowing 3PL service providers to enjoy all the benefits of these software systems, without the need to acquire, implement and deploy the technology within their organization. Contact iTech today to learn more about our technology and 3PL freight invoice processing and auditing services and what we can do to improve your bottom line.


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