Carriers must maintain a consistent cash flow that aligns with forecasts and withstands any unforeseen volatility. After all, when inflow projections don’t shake out, your balance sheet can limit your capacity (and your capacity to grow).
When managing cash flow, companies often overlook the importance of timely, accurate data collection and processing. Here, we’ll explore how data speed impacts your days sales outstanding (DSO) and your cash flow.
Cash flow and bill of lading data
Data can include inputs from many sources, but the most consequential in this context is bill of lading (BOL) data.
Alongside manifests, proof of delivery, and shipping orders, the BOL is elemental in global trade. But what if the data on this vital document contains errors? Depending on your BOL data input methods, common challenges may include poorly cropped images, inaccurate manual entry, or poor handwriting.
In the event of a dispute, a freight bill is not a helpful legal document unless it's accurate. Inaccuracy and uncertainty spell trouble for carriers, especially for proof of shipment and insurance claims. When freight billing data isn’t correct, such as when a BOL is post-dated, other aspects of the transaction can be called into question.
How to improve DSO and cash flow
How do data entry, BOLs, and claims relate to cash flow? In short, the information put into your transportation management system (TMS) directly impacts your DSO.
When BOL data is inaccurate, the costs associated with the shipment can also be wrong. Manifests are often written up with data from the BOL, so any incorrect information gets translated to the manifest.
On the other hand, when freight bill data is accurate, your shipments get to the right place at the right time for the right price. This makes invoicing and billing easy and keeps cash flow from getting tied up in claims and disputes.
Speed matters, but maybe not in the way you think
When people think about carrier speed, they usually think of topics like dock operations speed, logistics planning, responsiveness, order intake, and driver placement.
But just as important is the rate at which you can get accurate freight bill data back to the terminal for load planning, linehaul scheduling, and other optimization processes — when that data isn’t promptly relayed, it impacts workflows throughout the organization and operations can’t run at maximum efficiency.
Historically, carriers have had to pick between speed or accuracy with data. But now, new ways exist to streamline workflows and minimize human error. For example:
When data processes are designed to improve accuracy the first time and expedited to ensure mistakes are caught and resolved quickly, you can make better-informed decisions, improve truck utilization and send out invoices to clients as soon as possible — all of which can improve cash flow.
As Steve Smith, Senior Industry Advisor at DDC notes, “Don’t forget IT. You have to keep looking for ways to invest in technology to make your people’s lives better.” Speed for carriers is critical, and “If you can get that information faster and more accurately, then you can get it in your system faster.”
Achieve the speed and accuracy you need to improve cash flow
At first glance, data management processes may seem like secondary concerns in today’s fast-paced freight industry. It’s easy to put this aspect of your business on the back burner, but it pays to make it a priority.
Data that transfers quickly and accurately translates to streamlined processes, saved resources, more proactive planning, and more reliable cash flow. You’ll also experience higher efficiency and better staff utilization when time isn’t spent fixing errors or waiting for data to come through.
Improve the way you can transfer and process data, and you’ll improve the speed of your overall operations — which means you can get cash in hand much faster.
