If you have not changed your wholesale billing practices in years, it’s time. Your goal should be complete system automation that begins with automated order, automated dispatch, automated bill of lading matching, followed by automated electronic funds transfer notification and collection of customer money.
Let’s see on a step-by-step basis how to get fully automated, beginning with an automated order. In the ideal system, your customer’s daily inventory readings are automatically sent from the site directly to your system. When inventory dips below a certain volume, your system is triggered to automatically generate an order.
Now the non-human touched order proceeds directly to dispatch. If the ordered load puts a customer over their credit limit or if the customer is past due, all automation stops. The load does not proceed without human intervention.
Assuming no credit hold, the order proceeds. In the automated system, accurate pricing is immediately uploaded into your system’s pricing grid through on-line pricing data reception. The system makes margin optimizing rack choices automatically generating subsequent delivery tickets.
Delivery tickets are disbursed to drivers, and the driver goes to the designated location to load or deliver. Most software vendors have modules to allow this data to flow into your software system to be automatically matched up with your customer and inventory accounting.
For this automated feature to flow seamlessly requires doing your customer account homework up front. Pay particular attention to taxable versus non-taxable account set up or else you will have an accounting nightmare.
In the automated system, tax reports and payments can be done seamlessly without human intervention. You will be amazed at just how simple multiple state filings can be.
The next step is usually customer billing. In a fully automated system, on-board truck computers send actual drop volumes immediately into the system without need for human intervention.
The system will then provide the electronic funds transfer notice as required by law in the format specified by the customer, usually an email notification. On the payment due date, correct funds are automatically transferred from the customers’ account to your account, simultaneously updating your receivables.
The last step in the system is your supplier’s electronic notification of their intent to pull payment. Upon receipt, your system automatically matches up their invoice data with your payables data, with funds drawn from your account, provided there are no discrepancies. If the system finds discrepancies, the EFT payment does not proceed without human intervention. Notice in this system you get paid by your customer before you have to pay your supplier.
If your system has yet to reach this level of automation, you are not alone. Begin by calling your software vendor to see how far along they are in seamless automation. Vendors are constantly making enhancements to their programs, so it’s hard to keep up with system capabilities. Most companies are not using any system’s full capabilities. Your vendor wants to help you utilize their current automation features and may even ask to use your company as a beta site for further enhancements if they know you are game.
As you progress with automation, take careful stock of what is not working within your current manual system. In some cases, automation will cure the problem, but more frequently, automation exacerbates the problem. For instance, if you have been less than diligent with your new customer set-up screens, and the automated system needs all new customer information complete to work properly, you must go in and complete all the missing customer information before going live on your automated system, otherwise you’ll have a nightmare on your hands!
As you dip your toe into automation, use your own internal accounts whenever possible for testing before you go live with outside customers. You’ll get to discover and fix any glitches in your new system without damaging any valuable customer relationships!
To conclude, automation will be critical to future profitability. The most efficient companies will gain price margin advantage through automation cost efficiency. Make sure that’s you.
