According to a 2017 survey by the Global Supply Chain Council, 61% of supply chain professionals said that invoice matching was the most challenging process in their accounts payable department. The survey also found that 63% of respondents experienced invoice matching errors due to discrepancies between purchase orders and invoices. Additionally, the survey reported that only 21% of respondents had a fully automated invoice matching process within their organization.
This process is essential for any business, as it ensures that the costs associated with freight services remain in line with the budget. The freight reconciliation allows enterprises to more effectively manage their freight costs. By comparing the contracted rates with the actual charges, businesses can identify any discrepancies, such as incorrect charges, or billing mistakes. This process also allows businesses to audit their freight providers and identify any inefficiencies in the system. This allows businesses to nurture relationships with carriers or vendors, negotiate better rates with their providers and optimize their shipping costs.
Freight reconciliation in Dynamics 365 Finance is the process of ensuring that the freight charges applied to an invoice are accurate. This process involves comparing the carrier charges on an invoice to the carrier charges on the shipping documents, such as the bill of lading. If the charges are not in agreement, the discrepancy must be reconciled in order to ensure accurate and timely payment to the vendor. The process may also involve working with vendors to ensure that the freight charges are accurate and that they are applied correctly to the invoice.
Matching is the process of finding the freight bills that correspond to each freight invoice. Matching can be done by either matching the invoice lines one-by-one (manual matching), or by matching all available invoices at once (auto matching).
If your business reconciles freight manually, invoice lines must match each freight bill line or lines for the load that is being invoiced. This is done on the Freight Bill and Invoice Matching page. If the amount listed on the invoice line does not match the freight bill amount, then a reconciliation reason must be selected to justify the difference. If there are several reasons for reconciliation, you can split the unmatched amount across them.
1. Create a process map to show the back-office work involved with freight invoice processing.
2. Prepare your team to be open to changing what is currently broken
3. Review your existing back-office KPIs and create new ones that will measure the impact of automating the process at hand
4. Create open communication with your supply chain and back office teams to understand hidden sources of friction and/or inefficiency. Document their feedback and outline a change management process by bringing them into the automation initiative so that it is not ffeared.
5. Set goals. Can you reduce your Account Payables teams’ workload from 60 invoices per person per day to manually adjusting 2? Can you process 300 invoices a day instead of 75? What is your current benchmark and how do you hope to impact it through automation?
1. The freight invoices not matched get sorted by amount, with the largest amount first
2. The freight invoices get matched one-by-one, until the freight bill has no positive amount left
3. Depending on the audit master set up and the remaining amount on the freight invoices, the remaining amount is set
There are a number of terms to be aware of when setting up data for automatic freight reconciliation.
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