Today’s Data Dose is an original Transfix series that helps shippers identify the key metrics they should track to get the most out of their supply chain. Which data measurements should an organization prioritize, considering their unique pain points, network, and goals?
We’ve got answers. We’ve got insights.
Metric 8: Invoice Errors
A math problem for your consideration: “Juanita has 100 boxes of pastries to be delivered to
restaurants, and hires Bobby as a courier. Bobby is supposed to charge a total of X dollars, but
instead charges Y dollars. If Bobby and Juanita discover his error 6 weeks later—after
everyone’s accounts have been settled—what is Z, the number of aspirin Juanita will need to take
for the headache this gives her?”
Invoicing errors come in all forms: small/large, single/multiple, simple/complex. Larger invoice
errors can lead to expensive budget adjustments. Small errors can snowball over time, resulting
in big losses and big headaches. It is vital to analyze invoices, find inaccuracies where they
occur, and put measures in place to minimize them.
Mark Cohen, Customer Operations Director at Transfix, says this: “Invoicing errors are costly
not only due to the errors themselves, but also because of the cost of addressing the
error—including the extra touches by accounting staff required to fully resolve the error.”
Unless a department has the luxury of building enough “error resolution” troubleshooting into its
workflow, time taken to address issues becomes inconvenient. In an ideal world, this time would
rarely be needed—which is why shippers should proactively catch discrepancies before each
piece of paperwork progresses too far down the line.
Arnold Gunraj, Transfix’s Director of Financial Operations, approaches the issue from his
department’s perspective: “Invoice errors that aren’t corrected in a timely way can also lead to
inaccurate revenue reporting. Stakeholders are provided with a picture of revenue that is
inaccurate, which can lead to write-offs, bad debt, or credits back to customers.” Errors can also
result in loss of trust or bad relationships with customers or suppliers, and—as Gunraj would be
first to point out—costly, unnecessary work for Finance and Accounting teams.
Invoicing errors like our “math problem” scenario are by no means uncommon. As human
beings, we make mistakes—especially when it comes to rote tasks like calculations. The
important thing, however, is to have preventive measures in place that can catch these errors
before they escalate out of control.
Click here to learn more about Transfix’s Intelligent Freight Platform. And stay tuned for our next Data Dose: #9, Sustainability Tracking.