Generate More Accurate Freight Accruals
The generation of a freight accrual begins by calculating the expected cost of a shipment. This is done using a rating engine, such as the Cass Ratemaker® application. Ratemaker contains a database of information about your contracted carriers, freight contracts and corresponding rates. When you provide a shipment file to Cass – containing information such as carrier, weight, origin, destination and other key data - the rating system makes mileage and other calculations, and provides a total expected cost for that shipment.
Until an invoice is received for the incurred expense, this rated shipment record forms your freight accrual.
When an invoice is received, additional information – such as charges for unplanned expenses – may cause the shipment cost to change. In this case, the final shipment cost serves as the accrual amount.
Accurate accruals rely on the quality of the rating engine. Ratemaker is used by Cass clients globally, and considered more advanced than most rating engines because it:
- Rates every shipment at the charge level for maximum accuracy
- Rates shipments for any geography – eliminating guesswork for accruing international shipment costs
- Calculates costs in all currencies; can convert accruals to a single currency
We record all accrued expenses according to client-defined accounting rules, by division, move type, and/or cost center, for example. The accrual file is transferred to our client via system integration with your ERP or accounting system.
For clients lacking the ability to send shipment files, Cass can establish accrual information based on processed but not yet paid invoices and past history. While not as accurate as using a shipment file, this process typically yields results that are better than those currently achieved by most companies.