By Amit Mopari
As a freight forwarder, managing accounts is one of the most critical aspects of a business. There are several mistakes that need to be avoided to ensure that accounts are accurate, up-to-date, and compliant with relevant regulations. Here are ten common mistakes that freight forwarders generally make in accounts:
Inaccurate or incomplete data entry: One of the most common mistakes that freight forwarders make is inaccurate or incomplete data entry. This can lead to incorrect invoicing, and can result in delayed payments, disputes, and lost revenue.
Solution: iCAFFE (A freight forwarding software) automates data entry (via Excel, OCR, and API) and ensures accuracy.
Failing to reconcile accounts: Another common mistake which freight forwarders make is failing to reconcile their accounts regularly. Reconciling your accounts involves matching the transactions in your financial records with those in your bank statements. This can help identify errors and discrepancies, prevent fraud, and ensure that your financial statements are accurate.
Solution: iCAFFE is a system that automates the process of reconciling receipts, payments, and remittance vouchers during posting, with the aim of guaranteeing accuracy.
Ignoring tax regulations: Freight forwarders need to comply with various tax regulations, including VAT, GST, and customs duties. Failing to comply with these regulations can lead to penalties, fines, and even legal action.
Solution: iCAFFE complies with various tax regulations, including GST, TDS, and customs duties which automates complete tax calculation and ensures compliance with the latest tax regulations.
Lack of communication with clients: Another mistake that freight forwarders make is a lack of communication with their clients. This can result in misunderstandings, delayed payments, and lost business opportunities. It's crucial to communicate regularly with clients, provide them with timely updates, and address any concerns or issues promptly.
Solution: iCAFFE establishes communication channels with clients that provide real-time updates on shipments and automated timely DSR mailers.
Poor record-keeping: Freight forwarders must keep accurate and detailed records of all their financial transactions, including invoices, receipts, and bank statements. Poor record-keeping can lead to errors, delays, and compliance issues.
Solution: iCAFFE keeps accurate and detailed records of all financial transactions (with audit logs) and provides detailed reports, iCAFFE can establish an SOP for Digital record-keeping.
Inadequate accounting software: Using outdated or inadequate accounting software can lead to errors, inaccuracies, and compliance issues. Freight forwarders must invest in reliable accounting software that meets their specific needs and requirements.
Solution: iCAFFE Accounting is designed as per the needs of freight forwarders, which ensures accuracy and compliance with tax regulations.
Failure to monitor cash flow: Another common mistake that freight forwarders make is failing to monitor their cash flow. It's crucial to track your cash inflows and outflows regularly, identify any cash flow issues, and take proactive measures to address them.
Solution: iCAFFE adds a built-in feature of a cash flow management system that tracks inflows and outflows and indicates potential issues and proactive measures that can be taken to address them.
Not separating business and personal expenses: Mixing business and personal expenses can make it difficult to track your business finances accurately. Freight Forwarders should establish separate bank accounts and credit cards for their business expenses to avoid this mistake.
Solution: iCAFFE allows the establishment of separate bank accounts and credit cards for personal and business expenses, staff can send personal expense reporting and reimbursements.
Overlooking invoicing errors: Invoicing errors can result in delayed payments, disputes, and lost revenue. Freight forwarders must double-check their invoices for accuracy, including the correct billing rates, dates, and payment terms.
Solution: iCAFFE uses a maker-checker (Approval) concept for double-checking invoices for accuracy, Billing rates, and payment terms auto flow from Quote, AWB, and contract master.
Failure to conduct regular audits: Finally, freight forwarders must conduct regular audits of their financial statements to identify errors, discrepancies, and compliance issues. Regular audits can help identify areas of improvement, prevent fraud, and ensure that your accounts are accurate and compliant with relevant regulations.
Solution: iCAFFE helps to close months and jobs for adding or modifying financial entries after quarterly and half-yearly audits without proper authentication.
In conclusion, avoiding these ten common mistakes can help freight forwarders maintain accurate, up-to-date, and compliant accounts. It's crucial to invest in reliable accounting software, communicate regularly with clients, keep accurate records, monitor cash flow, and conduct regular audits. By doing so, freight forwarders can improve their financial performance, reduce the risk of errors and fraud, and grow their business.