Freight payments are a collection of processes that can be thought of in general terms as an accounts payable service for transportation invoices. Freight payment services providers, such as a 3PL, act as the intermediary between the shipper and the carrier to receive, process, and pay invoices. Every company is different so some processes may vary slightly, but typically invoices are sent directly to the freight payment provider by the carriers. Upon receipt of the invoices the following processes are usually included in a quality freight payment solution.
Invoice Receipt – Carriers submit invoices to the intermediary (such as a 3PL) in a variety of formats for processing. Typical methods include manual invoices sent via the mail or email and electronic invoices sent via EDI.
Invoice Validation – Upon receipt of invoices, the logistics services provider will validate and audit each invoice to make sure that the invoices have not been previously processed (duplicates), are the shipper’s responsibility to pay (billed correctly), and include proper/necessary documentation. Additional shipper specific validations are frequently included in this process such as the validation of bill of lading or purchase order numbers against a shipper’s internal data sets.