Cost reductions have become critical for logistics companies in recent years. Persistently high inflation has forced consumers to limit their spending to essentials, dampening demand for shipping services. Meanwhile, global conflicts have continued to disrupt shipping routes and push raw material prices upward, squeezing logistics providers’ margins.
Many logistics providers realise they must cut costs to remain competitive in this challenging market. However, their ability to identify and act on savings opportunities is often hampered by outdated financial systems that need more flexibility and visibility into operations. Bespoke legacy systems or generic accounting platforms prevent managers from accessing the real-time data and reporting required for true strategic decision-making.
Introducing new technology to remove barriers
Logistics is a complex business with narrow margins. Companies must maintain constant control of variable costs like fuel, temporary labour, and equipment maintenance. When finance managers need more transparency in daily operations, they can optimise these drivers of profitability.
Transitioning to an integrated, cloud-based finance system can eliminate some barriers to effective cost management. With a single system providing visibility into operations as they happen, managers get the targeted insights they need to identify savings opportunities.
Boosting cash flow with automation
Logistics businesses regularly pay vendors and transportation partners while billing customers. The high volume of transactions inherent to logistics poses cash flow management challenges. However, modern systems automate previously manual processes, including invoicing, billing, and collections. Automation not only speeds up cash flow but also improves the accuracy of data input by removing the reliance on the finance team.
With a real-time cash flow dashboard, logistics leaders have continuous visibility into upcoming receivables, payables, and cash positions. The system can carry out automated invoicing and customer payment collection when integrated with the business’s bank account. The system can email invoices to customers and then directly debit their accounts upon the due date. Automated reminders are also sent to ensure on-time payment.
Additionally, optical character recognition streamlines accounts payable by capturing supplier invoices received via email. The system then establishes optimised payment runs by holding payables until sufficient funds are available. This automated and transparent process helps businesses overcome the cash flow obstacles of logistics transaction volume. By smoothing cash flow, financial resilience is built without error-prone processes hampering operations.
Enhancing visibility through integrated systems
Logistics leaders need complete visibility into fuel, labour, warehouses, and shipping expenditures to optimise costs. Siloed data prevents businesses from identifying potential cost savings, waste, and inefficiencies. However, modern finance systems enable robust real-time reporting across the entire organisation. Alongside cost efficiencies, a clear picture of costs and profitability allows for the ability to strategically allocate assets, staffing levels, equipment, and budgets based on true needs rather than guesses.
Alongside reporting, intelligent finance software should also be interoperable. In the case of logistics businesses, integrating their stock management systems with their accounting software via interoperability means all data is centralised within one system. A genuinely interoperable system interacts with and shares information with software from third-party providers without the need for manual integration work. This once again heightens visibility and improves the finance team’s decision-making capabilities.
Making cost savings
Ultimately, modern accounting systems’ visibility, automation, and reporting equip logistics companies to make smarter financial decisions that affect the organisation. Whilst legacy systems often obscure opportunities for cost efficiencies, intelligent software will highlight them. As economic challenges continue to strain the logistics industry, can businesses afford not to understand where they can make meaningful cost savings?
bluQube is an accounting platform designed to help make the world of the finance professional that little bit easier. Whether that’s reducing administrative tasks with a unique user-friendly interface, eliminating data entry thanks to interoperable technology, or removing all those tech headaches with a market-leading cloud platform, now ten years strong.
With 25 years of expert development and implementation by consultants and qualified accountants, bluQube is adaptable for various business finance needs, spanning both on-premise and cloud systems.
Privately owned, UK based and without re-sellers, bluQube prides itself on doing things differently. www.bluqube.co.uk
