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3PL Warehouse and 3PL Billing automation for Dynamics 365

Both large and small businesses rely on 3PL companies to enhance their distribution capabilities and reach more customers, faster. However, major enterprise resource planning software providers have neglected to meet essential needs specific to 3PL. Avantiico has addressed this issue through the creation of our 3PL Warehouse and Billing solution. The Avantiico solution is an add-on to Dynamics 365 Finance and Supply Chain that addresses functionality needs of 3PL businesses. The solution provides a simple user interface for the creation and maintenance of customer contracts, real-time data collection automation, capturing of charges, and automated billing, eliminating tedious manual tasks to save your business time and money.

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5 Reasons to Use the Avantiico 3PL Warehouse and Billing Add-On for Dynamics 365

3PL Billing Automation Engine

people at a computer in a warehouse inspecting bills

Customer Contract Charges and Fees

man on tablet analyzing a box

Transaction-Based Charges and Fees

man checking warehouse inventory

Fulfillment Requests and Sales Orders

woman opening a box in a warehouse

WMS System Agnostic

3PL Billing Automation Engine

The Avantiico solution’s billing engine feature supports automated creation of periodic sales orders and invoices. The billing engine collects charges and fees based on customer contract terms. The engine is a powerful one, with the processing capabilities to handle millions of orders and order lines every week and billions of dollars in inventory. To reduce manual tasks, billable activities are captured based on warehouse operations or scheduled billing time. These billable activities include:

  • Receiving fees when receipts are posted in the system
  • Storage and periodic charges generated based on contract schedule
  • Shipping charges automatically triggered when packing slip is posted

These activities are then stored in a table to support customer billing. The billing engine deals with sales orders in-depth. Firstly, sales orders are automatically created with sales lines by charge type. This action can accommodate all transactions for a specified billing period. After the sales order is created, the invoicing process in completed using standard accounts receivable features in Dynamics 365 Finance. Sales orders can still be modified until they are confirmed, however, they are automatically confirmed based on the customer’s billing schedule. To review, users can drill-down into the details of billable activities in sales order lines. Invoice formats can be based on customer needs or a single invoice template.

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Recurring charge schedule for billing in Dynamics 365 Finance and Supply Chain

Customer Contract Charges

To define what is being billed, how those charges are calculated, and their invoice timing, customer contract charge structures are created. These are defined at the customer account level and defined as a one-off or on a weekly, monthly, quarterly, or annual basis. Periodic charges can be billed based on contract terms such as on a specified day. For example, on a specific weekday, the first day of the month, a specific day in each quarter, etc. There can be additional fees specified such as account setup fees and facilities initiation fees, service level agreement (SLA) fees, account management fees, monthly minimum charges, and accuracy fees.

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Transaction-Based Charges

Storage charges for items in Dynamics 365
This screenshot shows different storage charge factors such as refrigeration and item velocity

Transaction-based charges can include storage, receiving, and shipping charges. These are determined based on contract terms but can also be based on item setup. These items are defined by customer ownership, climate control requirements, item velocity, and other classifications. For receiving charges, they can be defined in any storage unit, on an individual level, by case, pallet, etc. The Avantiico solution supports many transaction-based charges around receiving, storage, and shipping. Examples of fees include:

Receiving Fees

  • Receipt
  • Inspection
  • Labeling
  • License plating
  • Put-away
  • Any other user-defined charge times
  • All receiving fees are calculated automatically, in real-time, and posted immediately
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Storage Charges Based On

  • Peak storage usage in a month (as calculated by a daily batch job)
  • Average storage usage in a month (as calculated by a daily batch job)
  • By inventory turns (based on a low, normal, or high velocity definition)
  • Storage fees can be charged by item classification and climate control requirements
  • Storage charges are calculated in the storage usage table at the item/customer level
  • All storage fees except those based on daily batch jobs are calculated automatically, in real-time, and posted immediately.
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Shipping Charges

  • Shipping charge (typically one per order)
  • Handling fee (maybe one per order or one per order line)
  • Packaging Materials (maybe one per order or one per order line)
  • Labeling/branding fee (may be calculated based on quantity, volume, weight, by order, by order line, or by charge unit, like a UPS dimensional/weight calculation)
  • Item Classification fees can define shipping charges for classifications such as: hazardous, fragile, special handling, etc
  • All storage fees except those based on daily batch jobs are calculated automatically, in real-time, and posted immediately
  • Shipping rates can be defined by carrier and level of service for data such as the shipping charge, branding fee, packaging materials, shipping document formats, etc
  • Other user-defined fees (many other user-defined fees can be created)
  • Shipping charges are automatically triggered when the packing slip is posted
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3PL Fulfillment process

Fulfillment Process and Sales Orders

The Avantiico 3PL Warehouse and Billing solution also adds functionality around fulfillment. Fulfillment requests can be received as EDI transactions, as Intelligent Order Management (IOM) marketplace orders, or as customer specific .XML or .CSV files. These demands will then be converted into sales orders. In our application, the fulfillment process uses the same standard entities as a typical sales process. Sales orders are identified as by type, with prices excluded, so that they will not be reflected in accounts receivable. Packing slips will be customized and be created to appear as if they were sent on behalf of the 3PL’s customer and include the end-customer’s name and address. Pre-defined contract terms and shipping charges will be reflected on the formatting of labels and by the packing slips. Leveraging the standard sales order process, steps such as releasing product to warehouse, outbound order creation, picking, etc. can follow standard Dynamics 365 Inventory Management, Warehouse Management, and/or Transportation Management business processes. 

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Purchasing Billable Activities

3PL Providers bill their clients for handling and shipping their products based on agreements for warehouse operations. This billable activity may include charges for packing, shipping, labeling/branding, kitting, and freight. With Avantiico’s Automated 3PL Billing solution, other warehouse-related fees such as monthly minimums, location replenishment, cycle counting, peak or average inventory levels, and one-time setup charges can also be included in the contract.
Additionally, this billing solution allows the 3PL Providers to bill their clients automatically for specific purchases made on their behalf, such as client-specific packing materials, containers, handling equipment, safety equipment, documents, inspections, and certifications. This enhances the automated 3PL billing process, encompassing more business transactions beyond the warehouse than before.
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Graphic of billable activities
Termination date graphic

3PL Contract Termination Date

The Termination Date feature has been recently added to the 3PL Billing solution. Previously, each contract header and line only had an Effective (start) Date and an Expiration (end) Date, similar to other D365 Finance features that require effective date ranges. Upon reaching the expiration date, the price for the contract line would drop to zero, which meant users had to plan ahead to replace the current contract or extend the expiration date to avoid manual corrections.
The Termination Date is accompanied by a List Price for services, which is usually higher than the negotiated contract price. When a new contract is not negotiated and its Effective (start) date is not set before the previous contract’s Expiration (end) date, the price for services changes from the contracted rate to the List Price until the Termination Date is reached. This feature shifts the responsibility of getting a new contract in place to the 3PL client and reduces the pressure on the 3PL Provider, as business can continue from the Expiration date to the Termination date at a higher price, providing better margins.
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Freight Reconciliation

This feature allows for the seamless import of invoices from carriers, which eliminates the need for manual data entry. No need to spend hours combing through quotes and invoices to manually match and reconcile. With real-time reconciliation, 3PLs can quickly match invoiced amounts to the amounts they previously quoted and recorded. Thus, ensuring that the billing process is accurate and up to date. This results in increased efficiency, profitability and simultaneously allows your 3PL company to focus on delivering exceptional services to their customers.
In addition, automated freight reconciliation can also provide valuable insights into shipping patterns and costs, enabling 3PLs to make informed decisions that can improve their bottom line. This allows your 3PLs to focus on growth rather than simply sustaining your business. Whether you’re a small or large 3PL, automated freight reconciliation will change the way you operate for the better insuring that your logistics operations are efficient, accurate, and cost-effective.
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Freight reconciliation graphic
Separate invoices by brand graphic

Separate Invoices by Brand

Avantiico’s Automated 3PL Billing solution is the ideal solution for 3PL clients who sell multiple brands and want to keep their accounting separate. This innovative feature allows clients products to be identified and sorted by Brand. In other words, contract lines can be classified as “invoice by brand”. This allows clients to receive automated invoices separated by brand with just as much ease as any other automated invoices.
With this feature the collection of billable activities is fast and efficient, with near-real-time data collection and automatic organization of sales orders by client and brand. This streamlined process eliminates the need for manual efforts in the billing process, saving you countless hours of work.
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Limitations Currently in Dynamics 365 Finance and Supply Chain

The Microsoft Dynamics 365 Finance & Supply Chain ERP system includes the Warehouse Management System (WMS) and Transportation Management System (TMS) modules that are excellent solutions for companies that own their warehouses and distribution centers. These solutions include many impressive features for supply chain operations, however, they lack capabilities essential to 3PL. The Avantiico 3PL Warehouse and Billing module for Dynamics 365 Finance & Supply Chain addresses the gaps that 3PL companies face when evaluating ERP solutions. These gaps center around specific warehouse and billing requirements that are associated with order fulfillment on behalf of a client. Avantiico’s new 3PL Warehouse and Billing module for Dynamics 365 is available to all Dynamics 365 Finance & Supply Chain users. For more information on the other Microsoft products that can be applied to 3PL, read our Ultimate Guide to Microsoft Software for 3PL.

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3PL warehouse working picking packages

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