It’s increasingly challenging for distributors to be profitable. In many cases, the products sold are commodities so, without clear differentiation, distributors need to compete on price, which hurts profitability. How can a distributor differentiate themselves without having to drop their price to unprofitable levels? One way is to scan proof-of-delivery (POD) documents and manage them electronically so that they are instantly available when needed for invoicing, to answer customer questions and to resolve disputes.
Below are two scenarios where document scanning and electronic management of PODs leads directly to happy customers and increased profitability.
Scenario A: One POD Gets Lost
Upon returning from their deliveries, a driver drops off a stack of POD documents at the warehouse. One POD is lost for a delivery that was successfully made in full. Murphy’s Law: following receipt of their invoice, the customer calls in and complains that the delivery was not made in full—perhaps mistakenly. Upon searching for the POD, neither the warehouse nor accounts receivable can find it. This puts the distributor in the uncomfortable position of having to make a second shipment or crediting the customer—each of which results in lost money and an unhappy customer.
The Alternative: each driver drops off all PODs at the office at the end of the day. They are either scanned internally or picked up by a document scanning company. The resulting electronic PODs are uploaded to the distributor’s document management system that has been integrated with their ERP system. When the customer calls to complain, accounts receivable quickly logs into their ERP system, retrieves the POD within seconds and emails it to the customer to prove the shipment was made in full—this informs the customer as to exactly when the shipment arrived and who signed for it so they can track down what went wrong with the shipment on their end instead of blaming the distributor. The customer is made aware of their internal problem, corrects it and appreciates the rapid distributor response instead of experiencing poor customer service or the distributor having to issue an unnecessary credit.
Scenario B: Partial Delivery
As in Scenario A, a driver drops of a stack of PODs at the warehouse though, in this case, he notes that one of the deliveries was only partially made. He makes a handwritten note on one of the PODs to let the warehouse know, but has to leave it on someone’s desk who just happens to be out sick. When the warehouse employee returns a few days later, they realize that there’s been an incomplete delivery and the customer is still waiting for the rest of their order. By this time, the customer has angrily called accounts receivable after receiving a full invoice, only to find that AR has no idea what happened. Because they needed the shipment made in full as soon as possible, the customer is upset, at risk of losing business themselves and now wondering if they should place their next order with another distributor.
The Alternative: as in Scenario A, each driver drops off all the PODs at the office at the end of the day, They’re scanned into the document management system and made available in the distributor’s ERP system. There is the addition of an index field which indicates whether the shipment was made partially or in full. Based on a “partial” index value, the document management system’s workflow module automatically notifies the warehouse (and the right person’s back-up when they are not there) that the remainder of the order needs to be picked and shipped as soon as possible, and it is. Accounts receivable then receives notification that they can invoice the customer only after the order is made in full. The customer understands that mistakes happen but appreciates that it is resolved quickly without them having to call in, complain and receive unsatisfactory customer service and an invoice instead of the rest of their order.Learn how a leading food distributor used document scanning to cut dispute resolution time from weeks to seconds.
The Benefits Are Clear
With a manual and paper-based system, proof-of-delivery documents can easily get misplaced or lost, leaving key people in the process—the warehouse, accounts receivable and the customer—in the dark when problems occur. Document scanning and document management help avoid these mistakes and help correct them quickly when they occur. This prevents unnecessary shipments and product credits, enhances customer service and increases cash flow as satisfied customers tend to pay accurate invoices faster. Let us know if we can help.