From Manual to Automated: Revolutionizing Remittance Handling for Large Brokers

For busy freight brokerages, effective payment remittance processes help optimize cash flow and boost operational efficiency. Automating the process to remit payment supercharges freight brokers’ back-office operations.

For some reason, corporate back offices have been slow to automate. A new McKinsey survey showed low digitization adoption rates in U.S. businesses’ finance operations.

“Nearly all (98%) of CFOs responding to a recent McKinsey survey said their departments have invested in automation technologies like artificial intelligence in the past 12 months, but many reported low rates of digitization across the finance function so far,” CFO Dive said.

Of the chief financial officers surveyed by McKinsey, 41% said one-fourth or less of their finance processes were automated, according to CEO Dive, which said the report also showed that “just one in five CFOs are using generative AI tools in particular, and nearly half of those efforts are still in the pilot and experimentation phase.”

Manual Remittance Handling: A Major Roadblock to Broker Efficiency

Perhaps back offices have been slow to adopt automation because of perceived difficulties in implementing new technology, but those businesses are being held back by manual processes.

Common challenges with manual remittance processes include:

• Time-consuming data entry and processing.
• High risk of errors.
• Delayed processing times and payment reconciliation.
• Increased administrative overhead and resource allocation.
• Multiple payment formats and remittance sources.
• Difficulty matching payments to invoices when remittance data is incomplete or inaccurate.
• Difficulty managing exceptions and short payments.
• Difficulty integrating cash applications with accounts receivable processes.

“Manual cash applications can be time-consuming, prone to errors, and may lack visibility into the payment reconciliation process,” Modern Treasury said. “These challenges can hinder the efficiency of the AR process and create potential discrepancies in financial records.”

Maximizing Efficiency: Leveraging Automated Remittance Handling in the Broker Back Office

“The need for cost-effective and efficient payment processing is imperative in today’s competitive business landscape. As transactions grow exponentially in volume and complexity, underpinned by relentless pressures to optimize operations while enhancing customer experiences, outdated manual systems struggle to keep pace,” RapidCents said.

It said that “by removing repetitive actions and human liability for failure, automation streamlines operations end to end – from invoicing creation to reconciliation completion. Faster transactions, lower costs, and delighted clients become the rewards for those willing to transform with the times.”

Key benefits of automated remittance handling include:

• Increased accuracy and reduced errors.
• Faster processing times and quicker payment cycles.
• Enhanced visibility and control over financial transactions.
• Reduced administrative burden and operational costs.

“Automation accelerates payment handling times, allowing businesses to expedite the movement of funds and improve cash flow administration,” RapidCents said. “By automating tasks like invoice approval and payment authorization, businesses can shrink processing times from days to minutes, enabling swifter and more efficient transactions.”

So you’d think automation would be a no-brainer. But a Deloitte study found that there are a number of barriers to automation in finance functions, including technical skill gaps, adoption risks, and culture and trust issues.

Those companies need a trusted provider that provides training and wins adoption with its easy-to-use functions. That provider builds a culture of high performance and high confidence and easily wins the trust of its software users.

Three Key Strategies for Effective Automation Implementation

CFO Dive said McKinsey predicted GenAI could enable automation of up to 70% of all business activities between now and 2030, “but many companies are wrestling with a host of risks and challenges with GenAI as they weigh potential investments.”

To effectively implement back-office automation, freight brokerages should assess their current remittance processes, select the right automation tools, and manage the transition to automation.

Assessing Current Remittance Processes

• Conduct a thorough evaluation of existing manual processes.
• Identify pain points and areas for improvement.
• Engage stakeholders to understand their needs and challenges.

Freight brokerages will likely find their current manual processes are slowing their cash flow and could be costing them customers.

“The cost of sending that wrong document or the wrong invoice, not only does it tie up your cash and make it hard for your customers to pay you, it also hurts your credibility with your customer. So there’s a massive amount of risk tied up in your billing and collections process today,” Upwell co-founder and CEO Charley Dehoney said on “The Freight Coach” podcast.

Selecting the Right Automation Tools

• Establish criteria for choosing an effective remittance automation solution.
• Look at integration capabilities, scalability, and user-friendliness.
• Conduct vendor evaluation and implement a decision-making process.

Modern Treasury said when choosing an automation tool, make sure it will increase efficiency, improve accuracy, speed up processing, and enhance visibility.

“Key considerations include evaluating software options based on features, scalability, and integration capabilities, ensuring a smooth data migration process, providing comprehensive user training, and continuously assessing and optimizing the cash application process,” it said.

Managing the Transition to Automation

• Establish best practices for a smooth transition from manual to automated processes.
• Train and support staff.
• Monitor and optimize automated systems after implementation.

Finance leaders also must be proactive in the transition to automation.

“As both stewards and strategists, CFOs have a critical role to play in helping their companies determine how to best use AI, whether for competitive advantage, greater productivity, or some other goal – and with the appropriate guardrails in place,” Steve Gallucci, the global and U.S. CFO program leader at Deloitte, said in a report.

Upwell: Building the Future of the Broker Back Office

Upwell harnesses the power of artificial intelligence (AI) to transform the billing-to-cash process. We have automated the invoice distribution process to ensure each bill reaches its destination exactly as customers require, whether that’s through electronic data interchange, application programming interface, email, or directly into online portals.

Upwell’s industry-leading remittance processing tool provides:

• Automated data capture and validation.
• Integration with existing financial systems and transportation management systems (TMSs).
• Real-time tracking and reconciliation of payments.

“We’re bringing that back-office intelligence, the best practices that the best companies out there are using, we’re bringing that into everybody’s office using our software,” Dehoney said on “The Freight Coach” podcast.

Upwell helps freight brokerages process remittances faster. Our back-office software automates legacy processes, enabling freight brokerages to immediately accept payments and access extra capital. By using our AI, freight brokers can quickly resolve invoice exceptions that are preventing them from getting paid.

Our automated remittance processing frees up employees for more strategic tasks; reduces errors and improves the integrity of data; enhances visibility by providing real-time insights into payment statuses and cash flow trends; and accelerates scalability by increasing transaction volumes as well as overall back-office efficiency.  

Our Online Payment Portal & Options feature offers customers a variety of payment methods through a secure, easy-to-use online portal. This feature accelerates cash flow and improves the customer experience.

Our Cash Application/Remittance Processing feature ensures payments quickly find their matching invoices, transforming what formerly was a painstaking process into a seamless and error-free operation.

The Cash Application/Remittance Processing feature automates the matching of payments to invoices, doing away with tedious manual tasks, and bringing unmatched accuracy and efficiency into a freight brokerage’s back-office operations.

Cash also comes in faster with our Automated Statements & Payment Reminders, which help freight brokerages set up automated, customizable communication sequences that gently nudge customers toward fulfilling their payment obligations.

Upwell Revolutionizes Freight Brokerages’ Invoice-to-Income Processes

Upwell is an invoicing and accounts receivable automation platform designed specifically for logistics and trucking. We help freight brokers and trucking companies get paid faster by automating the tedious tasks that bog down their back offices. From pre-auditing invoices to ensure accuracy to streamlining payment collections. Upwell’s freight invoice software improves cash flow while reducing overhead.

Upwell stands at the forefront of freight finance, empowering freight brokers with the latest technology tools to streamline their invoice-to-income processes to maximize cash flow.

Get an Upwell demo today.

‍