What is a Freight Bill?
Freight Bill vs. Bill of Lading
A bill of lading is a legally binding contractual agreement between a shipper and logistics services provider (LSP) for the terms and conditions of a freight shipment. It is 1) a document of the title of goods described in the BOL; 2) a proof of shipment/receipt for freight cargo delivery; and 3) a detail of special instructions and tracking information.
What information is contained in a Freight Bill?
The freight bill template or freight bill form may vary between transportation carriers. Standard information included across all freight invoices and freight bill forms include:
- Invoice number: a unique number code assigned to an invoice issued by a transportation provider. Invoice numbers can be used for payment tracking and matching to a corresponding bill of lading.
- PRO number: a number carriers use to organize and track freight shipments. A PRO number or “progressive number” combines a transportation provider’s Standard Carrier Alpha Code (SCAC) and a tracking number or barcode.
- Bill of Lading number: a unique number assigned by a transportation carrier and the primary number used for tracking freight shipment’s status.
- Transportation mode: the method of transportation used, such as less than truckload (LTL), truckload, parcel, air, rail, or ocean.
- Carrier and consignee information: contact names, addresses, and registration numbers for both the transportation provider issuing the invoice and the organization that consigned the freight shipment.
- Shipment weight and quantity: product dimensions, SCAC, weight, and total quantity of pieces.
- Cost of transportation and accessorial charges: specific details about the base cost and any ancillary charges related to the delivery, the shipment size or class, or other reasons for accessorial charges.
What is Freight Bill Processing?
Freight bill processing, freight payment, and freight bill audit payment refer to the combination of activities related to the accounts payable process for a freight shipment.
Freight invoice received by the shipper or its third-party freight payment provider; submitted by the transportation provider in digital format using electronic data interchange or as hard-copy invoices.
Invoice validation for the bill of lading and purchase order numbers, as well as confirmation of charges and open payment status.
Data capture of relevant shipment and supply chain information from freight bill and related documents to support business intelligence, driving process improvement, and transportation service adjustments.
Detailed rate and service audit against all contracts with the transportation carrier to confirm correct billing and validate services received.
Cost accounting and general ledger coding to assign freight costs to the appropriate SKU, customer, geography, division, or another financial reporting category.
Exception management for any incomplete information or incorrect billing and ensuing claims.
Payment of validated invoice and distribution of funds to the transportation carrier or LSP either electronically or manually.
Freight Bill Audit and Freight Payment Services
Freight bill audit and freight payment services providers complete freight bill processing activities on behalf of freight shippers, provide payment to carriers, and deliver aggregated billing of freight costs to the shipper.
What is Freight Bill Factoring?
Freight invoice factoring is a method trucking companies and other transportation service providers use to sell their unpaid freight invoices at a discount.
How MercuryGate supports Freight Bill Management and Freight Invoice Processing
MercuryGate transportation management solutions provide value to shippers through automated freight payment processes. Freight settlement applications are built into the MercuryGate Transportation Management System (TMS):
- Complete freight invoice reconciliation, freight bill audit, and settlement of accounts.
- Collect, manage and analyze data effectively.
- Eliminate manual processes and identify costly errors prior to payment.
- Avoid errors that jeopardize customer and partner relationships.
- Deploy accurate and efficient accounting practices.
- Execute touchless processing of carrier invoices with customizable rule sets for tolerance thresholds to support exception management for invoicing errors.
Automation of freight bill audit and freight payment activities reduces manual, time-consuming, and error-prone work. A typical automated freight invoice settlement process includes:
- Carrier submits a freight invoice and supporting documents.
- Freight settlement automation:
- Ingests the email and documents.
- Identifies the carrier, document types, and load (or loads).
- Matches information to the transportation management system (TMS).
- Confirms the carrier provided customer-specific required documents and references.
- Alerts the accounts payables team to any missing information or discrepancies.
- For accurate freight invoices that meet the shippers’ requirements, the accounts payable team settles the load in the TMS.
- Exceptions are identified for necessary intervention.
See how MercuryGate Freight Bill Settlement Augments Your Team
How MercuryGate Helps Brokers and LSPs Execute Freight Billing and Invoicing
MercuryGate TMS supports freight billing for brokers and LSPs. The TMS platform uses robotic process automation (RPA) to execute manual processes. Invoices flow in electronically and are matched automatically to loads, requiring no human intervention.
- Software flags exceptions for user attention.
- Carrier and customer charges can be GL-coded and integrated with financial systems. As changes occur, the system can generate, back out, or cancel transactions and rebill accordingly.
- Validate carrier rates with contracts and set tolerances for manual validation.
- Execute billing and accounts payable audits to recoup lost costs from duplicate or inaccurately billed charges.
- Carriers communicate directly with the system about invoices and disputes to expedite resolution and complete payment.
