Today’s trucking firms still feel ripple effects from this decade’s supply chain struggles and other industry-wide challenges. However, for many, an enormous obstacle to healthy growth and predictable cash flow lies within their corporate walls: their accounts payable (AP) processes. Paper-based, manual invoice processing leads to late payments and fees, duplicate payments, and lost invoices (and thus completely missed payments). These cause increasing frustration for the carrier’s vendors, suppliers and drivers, not to mention those monitoring the company’s cash flow.
Imagine a seemingly thriving trucking company in the Midwest— let’s call it Trucking Logistics Co. (or TLC) — with nearly 100 trucks delivering goods across the country. Beneath the successful surface, TLC’s overworked accounting staff struggles day in and day out with paper invoices and data entry, only to face a growing backlog of unprocessed payments. Despite its best efforts, the payables team simply can’t keep up with the current volume of invoices, much less scale to meet the growth projections of the board.
To make things worse, one of its major providers of truck parts and service — having experienced repeated late payments and lost invoices — threatens to halt deliveries unless the fleet operator gets its payment processing in order. At the same time, drivers start grumbling loudly about delayed reimbursements for their on-road expenses. Sour relations with critical suppliers, drivers, or any other necessary service provider aren’t what shippers want to see when choosing a new trucking company. Through no fault of its staff, Trucking Logistics’ AP processes were jeopardizing its operations and future growth.
On the bright side, carefully selecting and implementing digital technologies to automate AP processes can help fleet operators regain the trust of their suppliers and drivers. Even more, they’ll be equipped to better manage expenses, payables and cash flow, detect and correct inconsistencies, and — most importantly — get all those invoices paid accurately and automatically.
Even a moderately sized trucking fleet operator like Trucking Logistics incurs hundreds of invoices per month and thousands each year. These cover a variety of expenses related to the operation and maintenance of their fleet, employee expenses, and administrative costs.
For example, fuel is one of the largest expenses for trucking companies, with the frequency and number of invoices varying based on fuel prices, routes, and the number of trucks in the fleet. In addition, any fleet requires regular maintenance (like oil changes and tire rotations) as well as unexpected repairs, which can be irregular but quite costly. To round out this trio, invoices related to payroll and training — including salaries, wages, benefits, training programs and certification renewals for drivers and other staff — are some of the largest, most frequent invoices received and processed by AP.
Other expenses, more periodic but just as operationally critical, add to the mountain of invoices to be processed. These include invoices for lease and loan payments, insurance, permits and licenses, toll charges, logistics and freight handling, marketing and advertising, and ongoing administrative, legal and other professional fees, just to name a few. It’s not hard to see why handling such volumes manually is a crushing burden for a carrier’s AP team — a recipe for mistakes, lost invoices, late payments, and in the end, poor cash flow management.
