A good month that turns out not to be
The monthly report shows a strong gross profit. Two months later, carrier invoices for origin charges, a haulier's waiting time, a terminal storage bill and an agent's debit note have arrived and been posted against jobs that were already closed, or worse, against the month they arrived in. The good month was not as good as it looked, and the current month looks worse than it is.
Some of those costs were never recharged to the customer, because by the time they arrived, the invoice had gone.
Why costs arrive after the job is done
A forwarding job has many suppliers, each invoicing on their own schedule. You invoice the customer promptly because that is when you get paid. The costs follow, sometimes weeks later.
- Carriers, agents, hauliers and terminals invoice at different times.
- Some costs, like storage or waiting, are not known until after the event.
- Jobs are closed when the customer is invoiced, not when all costs are in.
- Late costs are posted wherever they fit, not always to the right job.
- Nobody checks that every expected cost has actually arrived.
What the gap costs
Reported profit is wrong in both directions, so decisions based on it, such as rates for a customer or a lane, are made on bad numbers. Costs that should have been recharged are not, because the customer was invoiced before they were known. And sales teams get commission or credit for margin that later disappears. We are not advising on your accounting policy; that is for your accountant. The point is knowing the true cost of each job.
The cost accruals we build
- When a job is booked, the expected costs are created from the quote's buy rates and the booking: freight, origin and destination charges, haulage, agent fees.
- Each expected cost is held as an estimate against the job until the supplier's invoice arrives.
- Supplier invoices are matched to their expected cost when they arrive, and the estimate replaced with the real amount. Differences are flagged.
- Costs that arrive with no expectation, such as storage, waiting or extra handling, are attached to the job and flagged as possible recharges to the customer.
- Expected costs that have not arrived after a period you set are listed, so the supplier can be asked or the estimate released.
- Job profit is shown as estimated until all costs are in, then as final, so reports distinguish between the two.
| Cost | Today | With accruals |
|---|---|---|
| Expected costs | Not recorded | Created from quote and booking |
| Late invoice | Posted wherever it fits | Matched to its expected cost |
| Unexpected charges | Absorbed | Flagged for recharge |
| Missing invoices | Unnoticed | Listed after a set period |
| Job profit | Changes without warning | Estimated, then final |
What you can see afterwards
Monthly profit reflects the jobs done that month, with estimates for costs still to come. Unexpected costs reach the customer's invoice more often because they are flagged while the job is fresh. Sales and management can see which customers and lanes really make money. And the finance team spends less time on month-end surprises.
Operators benefit too. A late haulier invoice for waiting time, flagged against a job they handled a fortnight ago, can be checked against the delivery record and recharged while they still remember the shipment, rather than months later when finance asks about it and nobody can.
Checklist
- Job profit changes weeks after invoicing.
- Late costs are not recharged.
- Monthly profit swings without explanation.
- Nobody checks that every expected cost has arrived.
- Commission is paid on margin that later disappears.