Logistics cost settlement has always been a pain point in business operations, involving complex billing rules, inefficient reconciliation processes, and financial pressure. Starting from the pain points of the industry, this paper deeply analyzes the core problems of logistics cost settlement and proposes systematic solutions.
In the field of commodity circulation, logistics costs are one of the “three mountains” in expenses (sometimes accounted for as performance or procurement costs), and they are also the most important part of eroding profits. As of 2022, China’s total social logistics expenses will be 16.7 trillion yuan, accounting for 14.6% of GDP. Logistics belongs to the performance and delivery link of the entire business chain, involving sellers, carriers, transportation networks, and consignees, and the business is complicated, which produces many challenging problems in the settlement of logistics costs, which boils down to the following core pain points:
Complex billing rules: Different billing rules for transportation, warehousing, loading and unloading, distribution and other links.
- For example, e-commerce promotion and wholesale business are parallel: the same enterprise operates both e-commerce platforms (involving full reduction and freight superposition) and traditional wholesale business (requires bulk discounts and account period management), and manual accounting is easy to confuse the rules, resulting in undercharging or overcharging.
- For example, cold chain transportation and ordinary logistics are mixed: the cold chain needs to calculate additional temperature control surcharges and refrigerated model premiums, while ordinary logistics are priced according to weight/volume, and if the system cannot automatically distinguish the rules, it is easy to cause settlement errors.
- There are also transportation costs: billing according to weight, volume, distance, vehicle type and other dimensions; Storage costs: calculated according to the area, number of days, number of operations, etc.; Abnormal fees: such as overtime waiting fees, return fees, insurance fees, etc.
Inefficient reconciliation: It takes 3-5 days for logistics companies or carriers to reconcile accounts with shippers every month, for example, the error rate of my last owner is as high as 5%, and the monthly reconciliation logistics cost is large.
Manual reconciliation is inefficient and has a high error rate
Large amount of data: Express outlets or logistics companies process hundreds of thousands of lines of data every day, and manually checking information such as bill numbers and freight rates is time-consuming and labor-intensive. For example, a 40-customer express outlet needs 5 days to complete monthly bill accounting.
Manual error: Due to the inconsistency or omission of the processing logic, financial personnel can easily lead to bill deviations, and even cause economic losses of tens of thousands of yuan per month due to the wrong deduction of funds by the headquarters.
Difficult to handle exceptions: Reconciliation discrepancies need to be manually checked one by one, such as when the courier company’s bill is inconsistent with the internal records, it takes a lot of time to locate the problem bill number.
Financial pressure: The account period is generally 30-60 days, and the cash flow of small and medium-sized logistics enterprises is tight. Provide logistics services in the same month, settle and reconcile accounts in the next month, and then provide invoices and payment during the payment period.
For example, fleet transportation services: drivers need to pay fuel and tolls in advance, but the customer’s account period is usually 2-3 months, and if the customer does not operate well or goes bankrupt, the driver faces the risk of not being able to recover the freight.
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Another example is cross-border logistics: involving customs declaration, tax payment and other links, the capital occupation cycle is long, and the cash flow pressure of enterprises is high.
Compliance risks: Many enterprises are strongly bound to front-line sales business in the logistics link to promote sales, which makes logistics contracts extremely complex and personalized, such as guaranteed quantity, tiered discounts (within 100 kilometers, 100-200 kilometers, and above 200 kilometers have different prices), and lack of dynamic early warning mechanisms; At the same time, it also causes difficulties in audit traceability and increased compliance costs.
For example, the contract stipulates that if the logistics timeliness meets the standard, 5% of the freight will be refunded, but it is difficult to trigger the rebate mechanism in time for manual monitoring, causing customer disputes.
There are also policy changes: such as port fee adjustments, oil price fluctuations, if the system does not update the rate library synchronously, it may lead to settlement violations.
01 Settlement system design concept
To settle logistics costs, you must first understand the concept definition. Settlement refers to the process of accounting, calculating costs, and paying according to specific settlement methods and standards based on the actual quantity and quality of goods or services, according to the signed contracts, agreements or documents.
In the logistics operation management system, the core content of settlement includes the settlement of transportation costs, warehousing costs, packaging costs, distribution costs and other links. For example, in the transportation process, in addition to considering the transportation distance of the goods, it is also necessary to consider factors such as the weight, volume, and size of the goods to determine reasonable transportation costs.
From the above, it can be seen that the core key of the automatic settlement of logistics cost products is that the rules are configurable, the process is transparent and traceable, specifically:
- Dynamically configurable rules: Users can configure settlement rules, including forward and reverse, as well as different expense types (i.e., business actions), such as transportation fees, storage fees, special fees, temporary fees, etc. It supports complex scenarios such as tiered pricing, large volume and weight, and multimodal combined billing.
- Transparent settlement process: each step of the calculation process can be traced, such as input factors, cleaning rules, calculation rules, routing, calculation result 1, result 2 and final result, etc.
- Traceability of the whole process: 19 key nodes from order to settlement and entry to generate general ledger vouchers to achieve penetrating tracking.
- Reconciliation automation, reduced from the existing N days to 1 hour, and introduced AI-assisted attribution to speed up the flow of funds. The key lies in data integration, variance attribution, and processing.
- Accounting automation: The “five-step method” is used for logistics cost entry, and the results are calculated in the current month and then entered into the provisional estimate, and the accrual and offset provisional estimate is made after the account is completed, and the payment process is provided after the invoice is provided, which is interlocked.
- Deep integration of industry and finance: Break through the data barriers of ERP, WMS, TMS systems and realize the integration of the whole chain of business and finance. For example, actions such as warehousing, warehousing, transportation, signing, loading and unloading, handling, and packaging in logistics operations can be automatically collected, automatically billed, and automatically accounted for.
02 Process and product architecture
The whole chain process of logistics costs is as follows, including the whole life cycle from order to payment, different from the traditional O2C (order to payment) and P2P (purchase to payment), it connects the above two major processes, the business result information generated by the former becomes the data source of the latter:
The product architecture of the logistics cost settlement system includes three parts: billing module, reconciliation module, and accounting module, as well as integration with peripheral systems.
The billing module process is as follows, including data access, data cleaning, rule engine, billing, billing check, timer, etc.
The reconciliation module includes bill introduction, bill entry, bill comparison, discrepancy processing, etc.;
The accounting module includes provisional estimates, bills of provision, payment notes, reverse processing, etc
03 Billing module
The billing process is as follows:
The following nodes:
1. Data access
Obtain raw data from multi-source systems such as ERP, TMS, IoT devices, etc. Due to the heterogeneous system architecture, software quality and management level, if the data source is a third party, the implementation process is more labor-intensive.
- ERP system: obtain customer order information (weight, volume, destination, service type).
- TMS system: Obtain transportation trajectory data (mileage, fuel consumption, time).
- IoT devices: Obtain the real-time location and driving status of the vehicle through GPS.
From the other side of things, the strength of the other party in system construction, IT management, and technical strength can generally be seen through the docking process.
2. Data cleaning
Deduplication, filling in missing values, handling outliers, and removing some data that do not participate in billing, such as internal transfer orders, inter-organizational settlement statements, and other information that has not actually been physically moved first; There are also some data collected by the express interface that is incomplete or abnormal (such as negative numbers).
3. Rules Engine
This piece is the most complicated, which will be briefly mentioned here, and will be discussed in detail in another article later.
The rule engine should not only realize the definability of the rules, but also support dynamic iteration, such as ladder billing, in the running Beijing to Changsha transportation route, February 28 is a rule, March 1 is another rule, March 15 rule is iterated again, the system must support frequent rule changes to adapt to the billing model, including forward, Reverse (e.g. recalculation).
In the logistics business, the main scenarios are:
- Tiered billing: 10 yuan for the first weight of 1kg, 5 yuan per kg for the next weight.
- Regional discounts: Customers in East China enjoy a 90% discount, and cross-border orders are subject to a 10% tariff.
- Dynamic rules: Free shipping for orders over 1,000 yuan during Double Eleven.
For example, the above-mentioned free shipping for 1,000 on Double 11 does not mean that the freight is not calculated, this freight buyer does not have to pay, but is paid by the seller as a marketing expense, so the freight should be calculated normally, and marked with a logo, and processed into different accounts in the accounting.
The rules engine generally includes the following modules:
A. Billing rule management
Define and manage billing rules, including creation, change, void, and so on. Once a rule is used, it is not allowed to be deleted, but can only be invalidated.
Example:
Billing by weight: 0-10kg, 10 yuan; 10-20kg, 20 yuan.
Billing by distance: 0-100km, 5 yuan/km; 100-500km, 4 yuan/km.
Billing by region: 50 yuan for fixed fees in area A and 80 yuan for area B.
Design Points:
Rules support prioritization (e.g., priority matching of specific rules).
Rules support condition judgment (e.g., customer type, order type).
Rules are configurable.
B Billing agreement management
Define personalized billing agreements for customers or partners. Set the referenced rules and calculation paths according to the business scenario.
Example:
Customer A: Billed by weight, enjoy a 20% discount.
Customer B: Billing by region, fixed fee reduction of 10 yuan.
Design Points:
The agreement supports binding with customers and suppliers.
Protocols support validity and priority.
Supports flexible combination configuration of rules to identify scenarios where cross-overlapping rules or blank rules are not covered.
C. Rate Management
Function: Define and manage rate schedules.
Example:
Base rate: weight rate, distance rate, regional rate.
Surcharge rates: fuel surcharge, holiday surcharge.
Design Points:
Rates support dynamic adjustments.
Rate support is effective according to time, region, and other conditions.
D Rule matching engine
Function: Matches applicable rules and rates based on input criteria.
Example:
Input: Weight=15kg, Distance=120km, Area=A.
Output: Matching the rule of billing by weight (10-20kg, 20 yuan) and the rule of billing by distance (100-500km, 4 yuan/km).
Design Points:
Support multi-rule matching (such as matching weight and distance rules at the same time).
Support rule prioritization and conflict resolution.
4. Billing
Based on the cleaned data and the rules in the rule engine, the complex billing logic is executed to obtain preliminary billing results. In this process, the focus is on whether the billing logic is correct and whether the data meets expectations.
Example scenario:
Priority billing for volume: Parcel volume 0.5m³, weight 3kg → calculated by volume (0.5×0.5×0.5×200=25 yuan).
Additional fees: fragile goods +20 yuan, holiday service charge +30%.
5. Billing verification
The previous billing is only a preliminary result and cannot be directly output, and needs to be verified without abnormalities before being transferred to the downstream to ensure that the billing results are reasonable (consistency, threshold, historical comparison). Especially now that AI is popular, many tasks can be entrusted to AI, especially the analysis and inspection work of verification based on historical data.
Example scenario:
Consistency verification: The difference in billing results for the same order in TMS and ERP is more than 5 yuan.
Threshold verification: A single freight of more than 10,000 yuan needs to be manually approved.
Historical comparison: 20% year-on-year freight increase triggers early warning
04 Reconciliation module
The reconciliation module is an intermediate link after billing and before accounting, and is the “quality inspection checkpoint” of the logistics billing system. The accuracy of reconciliation not only affects the accuracy of accounting and financial compliance, but also relates to the stability, continuity, quality service and trust with customers of suppliers.
The key points of the reconciliation function are:
- For example, check with supplier A that the total cost of the previous month is 100,000 yuan, and then check the details, such as 80,000 yuan for transportation, 10,000 yuan for storage, and 5,000 yuan for port miscellaneous. To support cross-system alignment of key fields such as order number, customer ID, and shipping node.
- Multi-dimensional verification, such as amount, quantity, time, status and other dimensions (such as freight and contract clause consistency verification);
- Exception handling: including rules and processing automatically determined by the system, manual intervention, compensation mechanism, etc., as well as data traceability, which is convenient for tracing the cause and locating the problem.
The reconciliation module corresponds to the focus according to different business scenarios of the enterprise.
For example, if the enterprise itself is a logistics enterprise, then its reconciliation is for two objects, one is the carrier or carrier driver, and the other is the customer. If the enterprise is a commercial enterprise, that is, the purchaser of logistics services, then its reconciliation object is the logistics service provider or carrier.
Therefore, when designing the reconciliation module, it responds flexibly according to the enterprise business scenario.
For example, the reconciliation platform of a logistics company, because the carrier driver generally does not have the ability to systematically bill, may feel that there is a problem with the total cost to troubleshoot the problem and check the details, then we must support the cost list at the waybill level and day dimension when designing; For the customer, the technical strength may be relatively strong, he may have his own system or tools to support complex billing, and he will automatically provide settlement data for reconciliation through system tools or APIs when reconciling, at this time, it must support the ability to automatically access data, at least support the ability to manually import.
05 Accounting module
In our logistics expense project, the accounting module reuses the document engine of the financial middle office, which will not be repeated here next time.
