The business of logistics spans a wide range of services. We’d like to focus on a very special and complex segment: parcel delivery. With all its typical characteristics on the financial and administrative side. This is a challenge that generic ERP solutions are just not fully up to.
Parcel data enters the system when the parcels are scanned for the first time. Each with a unique barcode for their identification. Well actually, not always unique, often a fixed set of barcodes is given to each of the receiving points and at a certain moment in time, these series are re-used. This method can be a source for errors and the need for manual corrections.
Once in the system, each and every parcel is accompanied by a large set of characteristics like data of sender, dimensions, weight, source and destination postcode. These characteristics form the basis for pricing. Delivery charges are calculated using these characteristics projected on to service prices, as defined in contracts and accounts. Hierarchies are required for the first look-up, to check whether a dedicated rate exists for this service, this customer, or this account. Or, whether a default price needs to be chosen.
Accuracy and completeness are key
Then, there’s a special role reserved for the surcharges. The delivery of the parcel is obviously a service that must be paid for, but additional price components might also apply. Consider, for example, foreign deliveries, island deliveries, express deliveries, fuel, road tax and out-of-gauge or overweight parcels.
After pricing, we need algorithms to determine what the invoices should look like. Are these parcels that need to be on a consolidated invoice? Or only mentioned in the appendix? Or sent to a portal for retrieval, if asked for? Does the customer want to receive the invoice in a foreign currency? And do foreign taxes apply?
There is also a rather special phenomenon: “self-billing”. Subsidiaries or other parties make the sale, and they supply the invoicing data. This is then compared with the data from the first scan and any issues that arise must be settled very quickly.
When we think about this from another angle, it’s clear that high data processing figures must be reached. Especially in these Covid-19 times, when more parcels than ever are delivered at home. Charges need to be issued as soon as possible, fully complete, to avoid revenue leakage.
Speed is also a must in the area of feeding the finance system. Real-time insights on a company level are key for management. This need for financial fulfilment has to feature specialities as well, like revenue recognition.
Speed is of the essence, but there are certain exceptions, when it really is better to hold an invoice. When a mail or email address is missing, or the price. In these instances, an invoice must be stopped until the correction has taken place.
Another complexity can lie in the exchange of data and payments with foreign partners.
When in the system, parcels must be retrievable at all times, that is a basic requirement. Questions need to be answerable for a long time period, long after the delivery has taken place.
Last and certainly not least, a good audit trail is a necessity. To see who and when has changed a price or approved an invoice. Additionally, this helps to accurately pinpoint slow areas in the process flow.
About ICORP: ICORP software is perfectly suited to parcel delivery, where speed, large volumes, data exchange and complex and changing rules apply. We are already working with clients where over one million packages need to be processed and charged every day. Find out more at https://icorp.nl/industries
