Maintain Profitability With These 4 Fast Back Office Enhancements
How can a motor carrier or 3PL truly strengthen operations so that it is married with sales goals and contributes to reliable – and scalable – revenue generation?
This isn’t a new question, but it’s one that is being asked more frequently in recent weeks. As sales and marketing strategies shift and your company’s budget goes back to the drawing board, you need to prove that your department is directly in-line with, and fully supportive of, the profitability of the business.
To do this, administrative, operations, finance and IT departments will have to step back, review their entire departments, conduct full SWOT analyses, and then: Pin-point the inefficient processes that do not align with the company’s goals. Once you dive in and investigate, you’ll uncover the variable and fixed costs that are holding your business hostage. By taking control of these situations, you’ll unlock resources that will improve your department’s performance and drive your revenue at an exponential rate- pandemic or not.
To help, we’ve listed 4 back office enhancements that, if implemented well, will significantly increase your operational adeptness and directly impact your company’s success:
1. Open an initiative to retain your most valuable employees
Turnover in the trucking industry has skyrocketed to 94%, according to The Washington Post. Although functions like carrier onboarding present their own unique set of challenges (recruitment costs, increased administrative duties, dedicated training time just to name a few), retaining a valuable employee is proving more complex and important than ever before.
A recent Inc. study shows that 70% of workers are actively looking for a new job. An invaluable team member is worth their weight in gold, so what are some things you can do to keep them on your payroll? Here are a few retention tips from our industry experts:
- Avoid understaffing to prevent burnout and exhaustion, and be sure to recognize their hard work.
- Invest in enhanced back office processes to keep team members from doing tedious and time-consuming tasks. More content employees produce higher quality results.
- Make professional development a top priority by supporting training and educational opportunities. According to LinkedIn, 94% of employees say that they would stay at a company longer if it simply invested in helping them learn.
2. Cut your days sales outstanding
The longer an invoice goes unpaid, the less likely it is to actually be paid- let alone in full. Your loss of revenue grows with the calculation of the time and resources invested into the service that you provided before the due date, and then the time and resources spent chasing down the payment.
If transportation providers don’t deliberately seek ways to decrease their days sales outstanding, they’ll continue aiming a moving target that they may never hit. A good first step is to set standards for how your process your bills of lading; standards that will specifically get accurate invoices to your shippers quickly and effectively. Turnaround time, quality metrics, and other performance goals must be upheld for your freight billing program to make a noticeable impact.
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3. QA your QA process
According to market research, 30% of all freight invoices are incorrect, yet many companies don’t have enough time or resources for a consistent and thorough audit of their own quality assurance (QA) process. Unfortunately, complacency comes with a price tag. Did you know that companies who don’t audit freight rates continually lose 7-10% in annual revenue?
How can carriers and 3PLs break the mold? Get an outside opinion from a third-party expert who specializes in business processes. A set of fresh, objective and experienced eyes into your quality assurance activities may shine a light on some uncomfortable truths, but acknowledgement is required for rectification. Before you know it, your back office will be running as a more efficient, powerful machine and key contributor to your company’s bottom-line.
Helpful hint: Freight rate auditing doesn’t just protect you from committing the biggest business blunders of your fiscal year, but it also equips you with a financial view into your operation and empowers your team to make informed decisions for the future.
4. Modernize your current proof of delivery (POD) system
This is considered “low-hanging fruit.” Modernizing your proof of delivery (POD) processing and retrieval system is an easy way to create visibility and streamline a commonly archaic process, and your most valuable shippers will take notice.
For example, if you’ve scaled down to a skeleton crew, you can easily stay lean but grow your margins. Transportation and logistics companies who take the steps expedite the scan, capture, processing and storage of their PODs can have a highly integrable, tech-enabled and data-driven back office that will help them play to win.
The US economy depends on the trucking industry to move 70% of all cargo, but that doesn’t mean the trucking industry can always depend on the economy. It’s imperative that you use your staff and your resources wisely.
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