12 Jan Transparent Freight Payment: The Top 4 Reasons Why Your Company Needs It
Freight payment can and should be transparent, but often it’s decidedly unclear for the shipper. Regardless, outsourcing carrier payment remains one of the most effective ways to positively impact the transportation department’s bottom line.
However, as with every outsourced service, there comes a degree of risk. With third-party carrier funding, that exposure comes in the form of minimal visibility to funds passed beyond your treasury. Once the money leaves your company, control over carrier disbursement becomes elusive. This can be a little scary for any business.
The freight payment industry, in large part, has begun adopting practices that provide evidence of a fiduciary process and safeguards that increase confidence. At a minimum, a firm should pay via ACH or secure check stock, use positive pay controls, obtain company-wide fidelity bonds, and provide SOC reports.
Over the course of a partnership, millions of dollars can pass from your company to a freight payment firm. If online visibility to the funding process is absent, trust can be abused. Only an independent review and oversight of the process can identify potential fraud before it festers into economic loss.
Only online visibility to freight payment funds provides complete transparency to the funding process. Beyond the minimal safeguards listed above, transparent freight payment offers your company updates at four critical points in the payment process. They include:
1. Deposit Confirmation
Weekly fund requests to pay carriers can exceed millions of dollars annually. Once the funds leave your bank account, a blind, functional acknowledgment is all traditional freight payment companies can offer. Your company must be able to independently review the receipt of funds. This concrete confirmation instills confidence that the funds are received and queued for payment to carriers.
2. Detailed Disbursement
Most carrier payment is made in the form of a paper check or ACH payment. Beyond the itemized fund, the shipper has little visibility to actual disbursement of funds. All to often, shippers simply trust the funds requested match the funds paid to carriers. The progress, transparent approach is to give clear evidence of detailed payment. Only online, itemized confirmation can provide complete peace of mind.
3. Verification of Payment
Float occurs naturally between when the money is issued to the carrier and when it is ultimately transferred. This pending-status can represent exposure to the shipper if there is no way to confirm the funds actually cleared the freight payment firm’s bank account. The fiduciary approach that nurtures confidence is to provide online verification that payment has actually occurred, demonstrating fund transfer to the carrier’s bank account.
4. Evidence of Funding
Traditional freight payment firms, through extensive manual labor, provide copies of cancelled checks and ACH control numbers. The next level in total transparency in freight payment is to offer a scanned image of a canceled check, ACH control number, or wire transfer confirmation, centrally accessed through a secure, online tool.
SSI delivers confidence and peace of mind for all our clients through independent, online verification of carrier payment. Our number one goal is the shipper’s trust. We take great pride in delivering full-visibility to the process. We work directly with our bank to give you nearly instant updates to funds in the payment-cycle. Our solution helps you know exactly when, where and how much was paid. Watch our freight payment video to learn more. SSI never forgets whose money we’re responsible for and guarantee we’ll be the most transparent partner you’ve ever had.