If you’re in the transportation and logistics industry, you’ll be pretty familiar with the Bill of Lading. A bill of lading is a contractual agreement with a company and their client. All of the terms of the business are laid out in the bill of lading, from what items are being shipped, to how much it will cost and when it needs to be paid. This means that the bill of lading is much more important than a receipt, as many people consider in the transportation industry.
The bill of lading has a few different important purposes. The first and main one that many use the bill of lading for is a way to itemize everything that should be shipped. When a client finally receives the goods, they will refer to the bill of lading to make sure that everything is accounted for. Although that is convenient for the client, the bill of lading serves many crucial purposes for the accounts receivable department.
First and foremost, the bill of lading is an important document for the accounts receivable department because it serves as a contract between yourself and the client. It is laid out clearly how much is due for payment and when it is due. If a customer does not pay on time, the accounts receivable department can refer back to the bill of lading and use it as a way to remind the customer that there is a contractual agreement and payment needs to be sent immediately.
Many client’s accounts payable department actually can’t pay an invoice until the bill of lading is received. If you want to receive payment as quickly as possible, it is important to send the bill of lading with the invoice. Although you may have sent a copy of the bill of lading weeks ago, the client could have misplaced it and then you’re wasting more time waiting to get paid over one document.
Finally, the bill of lading can serve as way to deal with invoice disputes. Some clients will state that they cannot pay the invoice because they did not receive every item that was supposed to be shipped. If you make sure that whoever is receiving the items signs off on the bill of lading, then you can refer to the document as a way to prove that everything was in fact shipped and received. This will help to speed up the invoice dispute process and eliminate “he said, she said” situations.
Clearly the bill of lading is much more than a receipt for the client to hold on to. It aids the accounts receivable department in their collections efforts and helps to speed up payment from clients. Additionally, it reduces the time spent managing invoice disputes. In the transportation and logistics industry, the bill of lading should be a document that is used in every business transaction and kept track of well.
Between bills of lading, invoices, purchase orders and statements, you need a way to manage your documents.
Find out how here.