COVID-19 Pushes Industry to Implement New Accounting, Bookkeeping Methods

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COVID-19 has created challenges throughout the trucking industry, but it also has created opportunities, especially when it comes to fleets’ accounting processes.

Work-from-home initiatives and social distancing have accelerated the transition to paperless transactions, emailed invoices and electronic payments, which are helping some fleets collect payables faster.

Before the pandemic struck, J. Rayl Transport still had many customers requesting mailed invoices.

“Once our office started working from home, a lot of our customers who started working from home asked us to email invoices going forward. That helps our billing time and our day of sales outstanding,” said Kerrie Mars, financial processing supervisor for the fleet. “We’re getting paid sooner because our customers are getting invoices 7-10 days sooner.”

Andrew Fletcher, a supervisor at John Bunning Transfer Co. Inc., based in Rock Springs, Wyo., has also seen customers request electronic transmission of invoices and opt to pay with electronic fund transfers.

“We find our payables go from 45-60 days to as little as 10-15 days. With the economic insecurity, it is nice knowing I can get an invoice, get it over there, someone is looking at it almost in real time, and it is going to be paid,” he said.

Fletcher uses Axon Software, which he said made social distancing seamless, so there was no delay in the fleet’s accounting processes.

“Without changing anything, all I have to do is give my employees access to a remote desktop, and they can work from home,” he said.

The amount of time between delivering a load and getting paid is a critical metric for fleets, said Jerry Robertson, chief technology officer at Bolt System, a cloud-based fleet management software provider.

“If you’re working from home, somebody has to look at the crib sheet, approve it, transfer it to accounting, and they may or may not have the correct codes that match up to the accounting system to,” Robertson said, adding that COVID-19 will go away, but the way business is conducted will not go back to the way it was prior to the pandemic.

Kevin Meyer, solutions manager for Trimble Transportation, said requests have increased for third-party payment solutions where Trimble exports invoices to a cloud system.

“Your suppliers can look at a portal, maybe quick-pay for a discount or choose to be paid by check, direct deposit or virtual card. We’re getting continually asked to do outside third-party services,” he said.

Software-as-a-service-based and subscription-based software can be more affordable and can eliminate the need for an upfront investment, which is helpful for medium-sized fleets, Meyer said.

Brothers

Robert Brothers, vice president of product development for McLeod Software, also cited increased interest in electronic payments.

“If I’m not in the office and don’t have someone to come in and print checks, I want to move that to electronic,” he said. “We have systems in place to do that.”

McLeod houses supporting paperwork from billing in a centralized document management system that is available in the cloud.

“If you can access that from anywhere, you can do your job from anywhere,” said Ryan Sparrow, DocumentPower product manager for McLeod.

Sparrow said it is vital for fleets to obtain the right information at the right time.

“You need to be scanning your incoming invoices that are payable as you get them. Now you have visibility, and everybody can work with it versus it being in paper form sitting on somebody’s desk,” he said.

What’s more, information needs to be collected in the same way.

Sparrow

“You want to build those policies into the application, so it forces the user to follow those as best as possible,” Brothers said.

Due to social distancing, more and more drivers are using electronic paperwork and electronic signature capture. McLeod offers a touchless electronic bill-of-lading system.

“The bill-of-lading document is the first to get some steam under it because it is a heavily used document that gets passed back and forth multiple times,” Sparrow said.

Drivers can use Axon to get a signature from the customer, take pictures and upload information to the order.

“It is a lot easier for the driver. The driver doesn’t have to run around and get signatures, and the customers are more likely to accept scanned documents,” said Jason Kretzer, sales manager at Axon.

Managing Documents With Mobile Apps

Mobile apps are enabling drivers to quickly collect information and scan documents.

“If you make it easy for them, they’re going to scan it in a timely fashion,” McLeod’s Sparrow said. “Things can come right from the driver’s device on the road directly into the imaging system. It is as easy as taking a picture of your grandkids on Thanksgiving.”

J. Rayl’s drivers use an app to take a picture of the bill of lading.

“It automatically sends it into the system under the load number. It helps reduce our billing time,” Mars said.

J. Rayl Transport’s finance team started working from home and handled invoices via email. (J. Rayl Transport)

Robertson said Bolt System’s objective is that once the driver gets a signature and captures that through any of the devices on the market, the system brings it in, gets the load invoiced and on the accounts payable desk before the truck leaves the parking lot.

“We can cut that invoice time down from days or weeks to minutes,” he said.

Sparrow said employing as much automation as possible is a best practice for accounts payable and accounts receivable any time, and especially during a disruption.

“The nice thing about that is it can do the same work the same way every time. When nobody can bend or break the rules, you can be a lot more efficient and accurate,” he said.

Dusten Scheere, chief technology officer for Frontline Technology Inc., which makes Q7 trucking business software that is available as a hosted system or in the cloud, also cited significant interest in cloud services due to COVID-19.

Scheere said he has seen many companies get mired in complexity with how they bill and how they pay.

“There are a lot of rules they’ve implemented over time, and they’re not agile anymore. Something like a pandemic comes along, and they can’t be flexible,” he said, adding that companies should review their processes and determine why they are doing things a specific way.

Third-Party Integration

Many software systems can also bring in data from other sources, such as a fuel card, so it smoothly enters the accounting system, which can increase efficiency and minimize the risk of human error, said Scheere, of Frontline Technology.

Trimble’s Meyer said small- and medium-sized carriers especially can benefit from software tools and integrations that help them consolidate data from various systems. He suggested fleets ensure that their accounting software supports integrations and added that imaging systems support the workflow to ensure accurate billing the first time.

Axon’s Kretzer noted that cash flow is critical. If a fleet has $1 million in receivables but can’t pay its fuel bill, the trucks can’t run. He explained that in order to collect receivables, fleets often need to have the right documentation attached to invoices.

“With Axon, all things get scanned and attached to the invoice. Anybody can see that,” Kretzer said. “If I’m working remotely and need proof, we can look at it.”

Kretzer said fleets’ customers often require specific information on invoices to process payments.

“We find that our customers are under a lot of strain from their customers. Their customers are requiring more and more information,” he said, adding that Axon can customize its screens to accommodate specific requirements. “Our customers can modify the information to suit their customers’ needs.”

When everything in an order is tied together with an invoice, it speeds billing and payment because no one has to track down information, Bolt System’s Robertson said. Bolt attaches everything from the transportation costs to a toll to a weight ticket.

“It is like you’re sending an email, and that email has all of the attachments,” he said.

Data Analytics

The right software can make it easier for fleets to identify trends and uncover operational insights.

Trimble has focused on making its tools user-friendly. The reporting tools in the software are very visual, Meyer said, adding that its customers can use plain English query tools and don’t have to write code.

Sparrow said McLeod has added some costing capabilities and analytics into its platform.

“You’re able to help the fleets understand profitability and costs and margins right down to a lane level,” he said. “It is a game-changer for companies, especially at the medium-size fleets.”

J. Rayl, which is based in Akron, Ohio, uses TMW’s data warehouse tool — TMW Reveal — and integrates it with its TMW database, Great Plains accounting software and TMT maintenance portal to provide near real-time data on sales, cash receipts, accounts receivables and the maintenance spend.

TMW Reveal (J. Rayl Transport)

J. Rayl also uses Power BI, a business analytics service by Microsoft, to pull together data to provide real-time visibility of financial and operational systems.

Fred Price, J. Rayl Transport’s chief financial officer, noted that within a trucking profit-and-loss statement, the top costs are drivers, fuel and maintenance.

“The better visibility you have into those items, the more you have control over your destiny, so to speak,” he said. “We can’t control the marketplace. We can’t control the customers and if they’ll be open or not. We can’t control the rates, but we have to do a better job of controlling our costs.”

The operations team at J. Rayl reviews revenue per truck, revenue per driver and driver productivity daily to aid planning. Some reports also identify imbalances in the network, Price said.

Fletcher, of John Bunning Transfer Co., said the data from Axon’s accounting system helps with the fleet’s bid process.

“We can see if a certain lane makes sense for us. I can get a good idea of where I need to be on a per-mile basis and base my bids on that,” he said.

Fletcher said there are some reports that Axon is running now that include a cash flow statement and an executive briefing, which shows pending payables, pending receivables, revenue, outside orders by department, and current, previous month and historical accounts payable aging data. He also uses a departmental comparison report to look for red flags.

Axon has alerts so fleets can easily see if a customer is over its credit limit.

“With the current economic conditions, that is being used more and more,” he said.

Bolt can parse data to monitor the speed of deliveries and tractor efficiency, Robertson said. It can also analyze tractor-to-trailer ratios and driver time to determine if it is more cost effective to use drop trailers or pay drivers to wait while equipment is loaded. The system can track specific costs, such as tolls and detention, so nothing is missed.

Mars said J. Rayl has created a collections report and an unbilled report. The team also monitors customer aging, days to pay and cash postings.

“Power BI helps us with just click a few buttons and have that data live,” she said. “That helps us pinpoint, especially during COVID, which customers are potentially at risk of default, which customers are we pulling more volume on who we may want to invoice sooner.”

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