Verifying Your Carrier Invoice Should Be Easier Than a Root Canal

Root canal? Check. Clean the cat box? Check. Verify the shipping invoice(s) from your carrier(s)? Check. Now THAT’S a day to look forward to, right? OK, maybe looking at your carrier bill isn’t quite like a root canal or dealing with the cat, but who actually looks forward to carefully verifying their shipping bill? There can be hundreds or thousands of individual package shipments to check. That’s a big job. Let’s look at making this an easier process.

The right shipping system can really help here. We often hear “I’m looking at my invoice and it looks too high.” The unasked question seems to be “Where are those great rates that were negotiated?” So how to go about checking the bills? If your shipping system's daily shipping reports show the carrier's published rates, you might try applying your carrier contract’s discounts to the published rates on your shipping reports. Since the discount percentage varies according to the service you use and the weight of each box, this is not really straightforward. But if your shipping system shows your company's specific rates, one immediate benefit is accurate cost reporting. So how do you get your company’s specific rates into your multiple carrier shipping system?

First, ask your shipping system provider to help you get your company's contracted rates with the carriers into your shipping system. This is a key step in making this an easier process and is a common request for shippers using our CPS shipping software. We help our users with this all the time. Next, be sure that your shipping system accounts for the fuel surcharges that are prevalent with some carriers. When your shipping system reports reflect accurate shipping costs, you can create a better, faster, much more accurate invoice checking process that works for your company.

There is a lot of power in a multiple carrier shipping system that uses your company's rates. And we’ll talk about another key benefit to this next time. Until then, visit www.HarveySoft.com if you would like to know more about CPS.

ADDRESS CHECKING 101 PART 2 – Getting it right to get it delivered

Address problems come in two categories. Last time, we talked about when the address is wrong, incurring address correction fees or worse, non-delivered, returned or even lost orders. No one is a fan of any of these. This time we look at another terrific benefit of address checking on your shipping system – determining whether an address is a residential or commercial delivery. Address checking at the shipping station checks the real, final shipping address, including the commercial or residential status. This is definitely important when you are checking for the best carrier and service to ship a package. In some cases, there is an additional cost for residential delivery service that could make a difference in the carrier you choose for a package.

Of course, you could use the post office (no residential surcharge) for every package or you could always ship with the carrier’s residential service regardless of destination. But you already know neither of these may be ideal for every package. Solving this problem by using address verification that also checks the commercial or residential address classification puts you ahead of the game. Another clear benefit is that, when you check the address at the shipping station, you are sure to catch possible mistakes for the exact address that you are shipping to. After all, who wants pages of unexpected residential delivery fees on their carrier bill?

What effect does this have on the shipping process? Here is how this works in our CPS shipping software. The Address Verification Module (AVM) for CPS uses a US Postal Service CASS certified database and: 1) checks if the residential/commercial choice is correct; 2) enables correct price rating between residential and commercial services; 3) makes sure the address exists; 4) checks if the address exists but is missing some key information such as suite number, apartment number, etc.; and 5) standardizes the address to match the USPS CASS certified database.

When the shipping system operator ships a package, the AVM first verifies the address data. Next, according to the way the AVM is setup, it notifies the shipper about any problems. Notification choices range from the AVM showing everything it’s doing to the fully automatic method in which it never interrupts the shipping process, making all of its changes automatically. These choices make address checking flexible enough for every shipping operation. Some address correction programs cost thousands. For CPS, it's just $199.99 to add this great capability.

Look for features to help with these situations in your shipping system. Our CPS shipping software has great tools to determine the best way to ship in all of these situations. Put these features to work for you in 2011 and your shipping system will put the savings on your bottom line. For more information about CPS and the AVM, visit www.HarveySoft.com.

ADDRESS CHECKING 101 – Getting it right to get it delivered

A CPS shipping software user told me about her frustration with the number of her customers who do not appear to know where they live. I asked for details and she explained that, on a regular basis, her company pays address correction charges or even has packages returned for bad addresses even though the address exactly matches the address the customer gave. Address correction charges are bad for profits, returned packages are bad for customer service, and she wanted to avoid both if at all possible. She researched the address checking option for her order system but considered it too costly. Then she called to ask if her CPS™ shipping system could help. We discussed her issues for a while and we determined how CPS could help.

For CPS, there is an Address Verification Module (AVM) designed to solve several address issues. As each package is shipped, the AVM checks each address against the US Postal Service CASS-certified database. The AVM tells you when an address doesn't exist, lets you know that the address exists but is missing some key information such as suite number apt #, etc. and standardizes the address format.

Undelivered packages cause unhappy customers. Use the AVM to check the address when a package is shipped and reduce (or even eliminate) address correction charges and packages that cannot be delivered due to a bad address. At just $199.99 she considered the AVM very affordable and chose it for her CPS shipping system. Did it catch any errors? In a follow up call, she told me their address correction fees dropped from $120 per week to “nothing” after they started verifying ship-to addresses with the AVM. Returned packages were virtually eliminated, too. That type of improvement to their shipping business process is significant.

The AVM can be set to provide various levels of messages about what it’s doing, from notifications every step of the way to virtually invisible operation. She ended up setting the AVM so that it notifies the shipper only when it needs to make a change. She also described one more way the AVM made a significant difference in her shipping and I’ll talk about that next time.

It's obvious that the shipping system is the link in getting the package out the door and on the way. Use the shipping system to verify that actual "ship to" address and you've done everything you can to make delivery as quick and efficient as possible (at the least cost to you), and that makes seller and buyer happy.

CPS is not the only shipping system that has this available, although the CPS AVM is definitely one of the least costly. Address checking in your shipping system is another way a good shipping system helps your company add money to the bottom line and solves the shipping problem of bad addresses. For more information about CPS and the AVM, visit www.HarveySoft.com.

Is Free Really Free?

All of us are aware of the free shipping software solutions provided by carriers like FedEx, UPS and USPS. They spend millions of dollars to develop these solutions for the shipping public and they all perform rather well. You may be asking yourself, how can they afford to provide free shipping software to their customers? The answer is “They can’t!”

Using the carrier supplied shipping system helps “lock” you in to that carrier, making it harder to use a different carrier. Their systems are primarily designed to help the carrier reduce its operating costs, but not necessarily yours. During rate negotiations, the carriers consider a number of factors in determining the rates that they will offer you. Things like box dimensions, claim frequency, and, not least of all, whether or not your company will use their shipping software. So, if the software really isn’t free, should you look for an alternative; one that might have an initial cost, but might save you money in the long run? We certainly know that one carrier can usually satisfy a shipper. Of course, that carrier can vary from shipper to shipper. The more important question to ask is, can a third party shipping system help even single carrier shippers?

Let’s use our CPS Shipping Software as an example. Shippers using just one carrier have praised the superior package processing times with CPS. Some single carrier shippers take advantage of the considerable savings on declared value insurance supported through the alternate insurance carriers. Still others like the safety net – “just in case” - of the multiple carrier capability of CPS. If the ability of your main carrier to pick up and deliver your packages is interrupted, the multiple-carrier safety net could be the difference in business as usual or a very real “worst case” scenario for your company.

In the world of “free” carrier software, we stay in business when your company profits on its investment in CPS. There is a yearly fee for CPS, and this should be compared to the cost of the “free” carrier software. The carrier provided systems are designed to be good for the carriers. And if you decide to use multiple carriers, each with the carrier provided software, there are definitely costs associated with using the different systems. Is shipping packages one way for one carrier and another way for another carrier the most efficient way? Using two systems, shipping system expenses double: shipping staff training; configuring the systems to work with your data; system updates, etc. These are costs that affect your bottom line.

The free systems lock you in and limit how effectively (if at all) you can make wise business decisions. CPS users and professional rate negotiators alike tell us shippers have a stronger negotiation position when using third party systems instead of free carrier software. Negotiate your best deal, and then use CPS to make the best choices for your shipping and possibly save even more by using an alternate declared value insurance company. Just a 1% or 2% edge can go straight to your bottom line. So, reward your bottom line every year and take advantage of the savings that a multi-carrier shipping system will bring to your business year after year.

For more information about CPS, visit www.HarveySoft.com.

Follow Up on the Post Office Update for April 2011

The recent April 2011 Post Office rate and service update underlined a couple of points that serve as good reminders for future updates.

Be sure to update your shipping system on time. This is important since the Post Office is different from the other carriers. The carriers that send a bill for shipping will always calculate the bills correctly even if the shipping system is not updated to show the latest rates. But with the Post Office, the postage that is applied to a package (or the manifest) has to be right for the day the package is taken by the Post Office, not just on the day the postage is applied. This gets tricky when the update is on a Sunday, you ship on the Saturday before but won’t give the Post Office the packages until Monday. I think the only exception to this is the “Forever” First-Class letter stamp that you can use anytime. But that’s not much help for package and envelope shippers.

And for good measure, test your update by checking a rate that you are familiar with to be sure your update installed correctly. Normally, the best way to do this is to start up your shipping system on the day of the update. It’s hard to get away from this procedure when everything needs to take effect on a specific date.

Next, if you use any application for Internet Postage, be sure to update it, also. There will almost always be an update for Internet Postage software when there is a rate/service change. Run your shipping system updates on time and you should be set when the rates go into effect.

A note about the new First-Class Mail Commercial Plus Parcel pricing-

The Post Office is treating the new First-Class Mail Commercial Plus Parcel pricing two different ways, and this has been a little confusing. This service applies to very high volume shippers for companies that qualify specifically for these rates and sign a contract. The Commercial Plus rates apply to all packages from 3.5 ounces to 15.99 ounces. The new First-Class Mail Commercial Base Parcel pricing is for lightweight packages from 1 to 13 ounces. The Post Office has just clarified that, if a shipper prefers, the new First-Class Mail Commercial Base rates can be used for packages up to 13 ounces and the Commercial Plus rates can be used for those between 13 and 15.99 ounces. Since the single Commercial Plus price is higher than the highest Commercial Base price, it doesn’t appear obvious why anyone would pay more and this has led to some confusion. The price advantage for First-Class Commercial Plus parcels is in the weight range between 13 up to 15.99 ounces.

If you are lucky enough to have the shipping volume to qualify for the Commercial Plus pricing, to take advantage this or any discounted USPS service, a shipper still must be using either manifesting or Internet Postage. Harvey Software's CPS Shipping Software is a multiple carrier shipping system that handles both. And simply using Internet Postage or manifesting with CPS immediately qualifies the shipper for a number of discounts, even if not at the highest Commercial Plus discount level.

A multiple carrier shipping system can help leverage Post Office services to their best advantage for your shipping. For more information about CPS, visit www.HarveySoft.com.

Watch for These New Post Office Rates Next Week

Like they promised, the Post Office is changing their prices on schedule again and maybe a little sooner than you might have expected. This is this year’s second of their new twice a year rate update schedule and is a month ahead of last year’s May timeframe. The changes take effect on April 17th. I summarized the changes below, and you can also see them at http://www.usps.com/prices/welcome.htm.

What you will see are new rates for these services:

Domestic
First-Class Mail Parcels
First-Class Mail Retail Letters
First-Class Mail Retail Non-machinable Letters
First-Class Mail Retail Flats
Parcel Post
Bound Printed Matter
Media Mail
Library Mail

Includes new First-Class Parcel Pricing:
First-Class Commercial Base Parcels
First-Class Commercial Plus Parcels

International
First-Class Mail

The Post Office reports these percentages of increase for this rate update:

Percentage Price Change by Product Category

First-Class Mail — overall 1.7%
Flats 5.3%
Parcels 3.8%
International (outbound and inbound) 4.0%

Package Services — overall 1.7%
Single-piece Parcel Post 1.8%
Bound Printed Matter (BPM) flats 0.7%
BPM Parcels 2.0%
Media Mail/Library Mail 2.0%

Extra Services and Fees — overall 1.7%

Also – why pay retail? To get the best deal on Post Office services, you want to be sure your shipping system uses online/Internet postage or, if your company qualifies, that you are manifesting. Harvey's CPS Shipping Software is a multiple carrier shipping system that does both. And qualifying for a discount is a whole lot better than paying a fuel surcharge!

Use your multiple carrier shipping system to leverage Post Office services to their best advantage for your shipping. For more information about CPS, visit www.HarveySoft.com.

Getting Paid

This tip was a suggested to me to share. Days Sales Outstanding (DSO) is a calculation used to determine how long it takes, on average, to collect receivables. A low DSO shows that a company collects receivables quickly. A higher DSO means that receivables are outstanding longer. Companies using this typically look at this monthly. To calculate DSO, divide the total outstanding receivables at the end of the period by the total credit sales, then multiply that times the number of days in the period analyzed (typically 90 or 365 days).

Right off, a low DSO seems preferable to high DSO, and that’s generally right. But if DSO goes too low, it could be that credit policies might be too tough and could be limiting sales. Most of the time, though, it’s the higher DSO that cause concerns. As the DSO gets higher, cash flow problems can result. This could result from customers being unhappy with a company’s product or service, selling to customers who are not ideal credit customers, or that the company’s collection/credit department is overloaded or not well-organized.

Looking at DSO as it changes over time can often point out trends. Sometimes, a “gentle reminder” needs to be communicated to your customers about their outstanding invoices (or sometimes a not so gentle reminder). One way to send the message is to make sure that your billing process tells your customers that you expect prompt payment. Your company’s shipping system can be one important tool to help keep DSO in check. First, use the shipping notification feature when the order is shipped. In our CPS shipping software, the SHIP eLERT® email lets customers know their package is on the way. When your billing department knows that every customer is notified that their order is shipped, they have information that lets them be more effective in the collection process when they contact customers about accounts receivable. That’s the first “helping hand” from the shipping system.

Next, your shipping system can also let you know that delivery has been made. Instead of tracking one package at a time, CPS can track every shipment in a given date range and let you know, at a glance, the delivery date. One ploy by slow payers is to say “We didn’t receive the order.” There can always be delays in payments due to many reasons, and you may want to continue to do business with at least some slow paying customers. Use the tracking information from your shipping system to help your collection process become more successful and keep DSO in the right range. For more information about CPS, visit www.HarveySoft.com.