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The logistics industry might appear straightforward at first glance—transporting goods from Point A to Point B, occasionally passing through Point C. However, the intricacies of accounts payable reveal a more complex reality, as ensuring seamless deliveries requires meticulous financial processes and coordination.

The Hidden Complexity of Logistics: From Simple Shipments to Document Overload

At first glance, the logistics process might seem straightforward: delivering goods from one point to another. Whether it’s a massive piece of machinery or thousands of face masks, the core steps often look the same, involving multiple stakeholders:

• Local Pickup: A company collects the container from the customer’s facility and transports it to the nearest train station or harbor.
• Global Transport: A carrier handles the long-distance journey across the country or overseas.
• Final Delivery: A carrier handles the long-distance journey across the country or overseas.

Let’s take an example: a company shipping goods from Malaysia to Singapore. This is where logistics providers come into play, streamlining and managing the process with precision.

In this scenario, the logistics provider contracts:

• A local company to transport the goods to the shipping port in Malaysia.
• A shipping company to move a 40-foot container to Singapore
• A transport company in Malaysia to deliver the goods to their final destination in Singapore

While the process might seem simple, the associated paperwork can quickly spiral out of control. Consider the following documents required for this journey:

• A customer order to initiate the shipment.
• Multiple purchase orders for each service provider involved.
• Bills of lading for customs clearance in the U.S., Germany, and Austria.

The Paper Trail: From Shipping Containers to Tsunamis of Documents

To reduce shipping costs, the logistics provider optimizes the container by combining goods from various customers heading to different destinations. This adds another layer of complexity:

• A warehouse in Malaysia is contracted to divide the freight.
• Additional customs documents and purchase orders are generated for this redistribution.

Once the shipment is complete, all service providers expect timely payment. They submit invoices and billing documents, often bundled into collective invoices for multiple shipments. Managing these financial settlements can be a significant burden for accounts payable (AP) departments.

Automation to the Rescue

For logistics companies grappling with complex accounts payable (AP) processes, the traditional approach often involves assigning more staff to handle the workload—leading to increased operational costs and inefficiencies.

But there’s a smarter solution: automation.

The Importance of Shipping Numbers

In the logistics industry, the shipping number plays a pivotal role. Unlike other sectors, where order references vary widely, logistics companies rely heavily on this unique identifier to organize and manage orders. It’s the key to connecting supplier and customer documents, making it an indispensable reference point.

This reliance on shipping numbers is also a reason many logistics providers hesitate to embrace AP automation. They fear that standard automation systems won’t be able to handle the industry’s unique requirements, potentially causing disruptions for their business and customers.

Advanced Automation Solutions for Logistics

What many logistics providers may not realize is how far automation technology has advanced. Intelligent solutions like AP automation in SAP can adapt to the unique needs of the logistics industry. Here’s how:

• Customized 3-Way Matching: The software establishes a relationship between all relevant data points on supplier and customer documents. By using the shipping number as a key reference, it ensures accurate matching and processing.
• ERP Integration: Whether you use SAP or another ERP system, AI-powered automation optimizes every step, from data capture to data storage.
• Intelligent Workflows: These workflows automatically route documents, flagging any discrepancies for clarification to prevent bottlenecks.
• Integrated Archiving: With a secure archive, all documents and data are stored digitally, ensuring quick and effortless retrieval.

Benefits of AP Automation

By adopting an AI-driven AP automation solution, logistics providers can streamline operations, reduce costs, and eliminate the chaos of paper-based systems. Key benefits include:

• Improved Efficiency: Automation minimizes manual data entry and reduces errors, speeding up invoice processing.
• Cost Savings: Fewer manual tasks mean reduced staffing costs and more efficient resource allocation.
• Environmental Impact: With digital archiving, paper usage and storage become relics of the past, supporting eco-friendly practices.

A Simpler Future

Automation transforms AP processes, enabling logistics providers to operate more effectively while meeting industry-specific challenges. By leveraging advanced solutions like AP Automation, businesses can eliminate paper clutter, streamline workflows, and focus on delivering exceptional service to their customers.

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