From the March 2011 issue of Treasury & Risk magazine

Invoice Pile-Up

Southeastern Freight Lines finds that slowing down billing actually means getting paid faster.

Southeastern Freight Lines may be a modest $774 million company, but there's nothing midsize about the more than 500,000 paper invoices the Lexington, S.C.-based company sends out each month to its 68,000 customers. In 2007, the less-than-a-truckload (LTL) shipping company reviewed its invoicing process and decided that the way to collect faster, ironically, was to invoice slower. "We used to bill the day after a shipment was picked up, regardless of when it was delivered," explains Ron Pagoota, SEFL's director of revenue accounting. "The change was needed in order to provide our customers with one bill for all transportation-related services for that shipment."

A single SEFL truck might make 15 to 20 deliveries in a day. "It's not uncommon for us to attempt a delivery and have the receiver ask us to come back later, for which we charge a redelivery fee and issue a second invoice," Pagoota explains. "We might charge $140 for a primary delivery and then $57 for having to redeliver."

Pagoota says SEFL transmits two files to Wells Fargo each morning, one for invoices and the other containing images of related documents.

"It used to take four people seven hours each day to sort, stuff and send the invoices," he says. "Now it's all finished within an hour. If a file is rejected or corrupted for some reason, it is identified, the problem fixed and the file processed before I even get in to work in the morning." He estimates the outsourcing arrangement saves SEFL $225,000 a year.

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