Technology is key to maintaining a healthy cash flow

Many logistics companies have seen profits take a hit during the pandemic despite being busier than ever. Unfortunately, it’s often an adverse cash flow scenario that’s the culprit with customers consistently making pay late payments. Technology can play a key role in accelerating the invoicing process and ensuring clients consistently pay by the due date.

What are the consequences of delayed payments?

For many UK logistics organisations, inefficient ERP, WMS & TMS legacy systems prevent the optimisation of key processes with a direct impact on productivity and profitability. Invoice automation is an obvious area where immediate efficiency gains are possible.

If invoicing is still largely a manual process within the organisation then significant time delays are generally the norm. There could be delays caused by the processing of paperwork by the internal finance team, adding to the negative experience of deliberately slow paying customers. The adverse effect on cash flow may negatively impact and constrict businesses in a variety of ways  

• Constrain the ability to acquire and serve new clients
• An inability to meet daily running costs
• Inhibit business expansion plans
• An inability to pay your own suppliers 
• An inability to maintain external loans & other sources of finance  

In the current business climate, dominated by the additional challenges imposed by the pandemic, core financial health is critical to business survival. Against this background it is logical to consider investment in systems that can greatly enhance key business parameters such as cash flow.

Digital Invoicing

Since the beginning of the pandemic, the incidence of delayed and unpaid invoices has increased dramatically. Businesses can counter the adverse impact on their bottom line by digitising their invoices. 

Modern delivery management software, such as Touchstar’s PODStar package, are equipped with a front-end app that drivers can use from remote locations. The app enables drivers to instantly generate an electronic proof of delivery the moment they’ve completed the delivery. This information is transmitted in real-time to the back office allowing instantaneous generation of invoices.

Creating invoices automatically also eliminates the potential for human error via inaccurate re-keying of data. As a result, customer disputes are also drastically reduced and invoices more rapidly signed off and the payment process initiated in a timely manner. Digital invoicing also saves on back-office costs and time by reducing or eliminating labour-intensive processes.

The financial pressures endured by logistics organisations are likely to continue beyond the current pandemic as companies strive to move beyond survival mode and to re-focus on growth. Regardless of the background economic climate, any viable business should consider streamlining its financial processes with a view to optimising cash flow. For those organisations with a delivery element to their operation, electronic proof of delivery (EPOD) technology allows the elimination of paperwork and the optimisation of the delivery and subsequent invoicing processes. Investing in a modern state-of-the-art software system like PODStar and digitising your invoices will directly improve your bottom line.