Artificial intelligence (AI) is taking many industries by storm, and the freight forwarding industry is no exception. Raft recently began a new webinar series in partnership with OrangeLime Consulting (OLC) exploring the future of freight forwarding and trends impacting teams within finance, operations, customs, and sales.
In the first webinar in the series, industry experts discussed the impact of AI and automation on finance teams in the freight forwarding industry. Raft CTO and Co-founder Nisarg Mehta was joined by Shane D’Aprile, Managing Director at OLC as well as Adam Hill, President and COO at The Scarbrough Group and Nicole Steinmetz, COO at Cargo Brokers International. The discussion highlighted the challenges faced by finance teams and the current state of finance, as well as aspects of automation that can help address these challenges.
The current state of finance in freight forwarding
The webinar kicked off with Shane D’Aprile leading a discussion about the current state of finance to unpack the issues that freight forwarding teams typically face.
So, what is all the rage about? What are some of those challenges?
1. Too many manual processes with multiple touchpoints
Shane described a common situation facing finance teams involving tedious, manual processing of invoices as well as cluttered mailboxes and a lot of back-and-forth communication between AP teams, operators, and vendors.
One of the major challenges faced by finance teams is the processing of messy, unstructured data that comes from different sources, such as PDF invoices, EDI invoices, Excel files, and emails. This data needs to be processed by the finance team, which can be a time-consuming and cumbersome process in itself.
There is also the challenge of data insufficiency. In other words, incomplete or inaccurate documentation and “garbage invoices”.
2. Complex approvals and reconciliation
Processes for approving invoices can be complex and often involve forms, multiple touchpoints, and constant training of teams. Matters are made worse when invoices don’t match accruals, accruals aren’t entered into systems, or invoices may never be sent to AP because they’re stuck in a job owner’s inbox. In order to resolve these issues, finance teams face a scenario of chasing down operators who are usually so focused on managing the shipment that they leave accounts payable to the last minute, resulting in a further drain on time and resources.
3. Finance is seen as a cost center
Finance teams exist for a higher, strategic purpose but due to the very mechanical nature of invoice processing and invoice reconciliation, they are increasingly seen as a cost center, lacking the time and headspace to add value in ways that improve cash flow, vendor relationships, and customer service.
Genie in a bottleneck: How is automation empowering freight forwarding finance teams?
The webinar experts discussed how AI-powered platforms like Raft are completely transforming how finance teams work while maximizing efficiency gains and reducing costs.
1. Streamlining financial operations efficiently at scale
Automation is relieving the burden of manual invoice processing by not only making sense of unstructured data but also bringing all that data into one centralized platform and understanding the overall process, workflow, and governance. In effect, automation streamlines financial processes from start to finish.
As Nisarg explains, “Raft identifies invoices that might need attention – that are garbage in quality, where accruals don't match, or the exchange rate isn't what you want it to be. If everything matches, it's automatically processed and that's a powerful thing – you could have hundreds and thousands of invoices automatically processed with zero human intervention. The system automatically matches those invoices to the jobs and to the accruals and you are left only with the exceptions and can eliminate back-and-forth emails between accounts and operations teams.”
Another challenge faced by finance teams is scalability, as invoices need to be processed across multiple offices, branches, and geographies.
As Nicole Steinmetz notes, the team at Cargo Brokers are now processing 2.5x the number of invoices that had been processed manually in the past and 70% of invoices are processed with one person or zero human intervention.
She also noted how automation is helping to support quicker responses and bolster resilience to supply shocks.
2. Reducing team friction and working smarter with operations
AI-powered platforms can help improve collaboration, communication, and workflow. Raft, for example, allows teams to work together, tag colleagues, and maintain an audit trail. Notifications can be set up to avoid cluttering email threads, and the entire platform can be set up to streamline the workflow.
Speaking about the impact this is having on how accounts and operations teams work together, Nicole commented, “Nobody wants to get an email from accounts that says you didn’t do your accruals or you didn’t do your role. Now they’re being more diligent about putting in their accruals. If there’s an issue, a discrepancy, or a dispute, we’ve put processes in place that streamline that. Raft makes it so much easier for us to communicate. Now we know which operator had that file because it pulls that job costing owner from the billing screen in Cargowise. And it's right there in Raft for you to see.”
3. Making smarter financial decisions with actionable visibility
Visualization and analytics are also important aspects of automation. Being able to visualize the process and identify bottlenecks can help improve the process and make it more efficient. The data can be used to identify areas for improvement and to encourage branches or vendors to improve the quality or accuracy of their invoices.
4. Finance as a strategic lever
The experts noted that finance teams exist for a higher purpose than just processing invoices. They can use automation to free up time and make finance a strategic lever in an organization. Finance teams can use the data to improve cash flow management, enable better service to customers, get goods released faster, and build better relationships with vendors.
What else can automation do for finance?
The benefits of automation in financial operations extend beyond just accounts payables. The webinar experts discussed some of the ways in which an intelligent logistics platform like Raft is becoming a centralized, financial operating hub, impacting areas such as:
- Statements: The reconciliation of statements from vendors and overseas agents can be a tedious process, involving comparing statements against accruals and invoices. To streamline this process, tools are being developed to make reconciliation easier, using integrations with transport management systems like CargoWise.
- Accounts Receivables: The management and posting of receivables is another area that can benefit from automation, as it involves complex processes to match remittance advice and receipts to invoices.
- Payments: Automation is being applied to payments and with integrations to payment providers like Cargo Sprint and Pay Cargo, the manual steps required to execute payments and end-of-month reconciliation are removed, freeing up more time for finance teams.
By automating these processes, finance teams can focus on higher-value tasks and have more headspace to think strategically and creatively.
In summary
Overall, automation is transforming financial operations. Raft’s intelligent logistics platform is providing a holistic solution for entire finance teams. But the power of Raft doesn’t stop there. By automating the lifecycle of a shipment from start to finance, Raft is a robust tool that handles all aspects of freight forwarding operations, including customs, sales, and customer service.
Stay tuned for our next topics in this “Future of Freight Forwarding” webinar series, which will cover the impact of automation on the entire freight forwarding journey.
And why not get started with incorporating automation into your own financial operations? To discover how, schedule a personalized demo today.