3PL accounting systems: What they are and why they matter

That’s why more logistics companies are adopting 3PL accounting systems. These platforms put warehouse, transportation, and client billing processes into one place. Every shipment, transaction, and invoice is tracked automatically, reducing manual work and expensive mistakes.

This guide looks at the role of 3PL accounting systems in inventory management and how they can help logistics providers work smarter. You’ll also learn what to look for when choosing one for your business.

Understanding 3PL accounting systems

A 3PL accounting system is software made specifically to handle logistics providers’ financial workflows. Unlike traditional accounting tools, it links directly with warehouse management systems (WMS), transportation management systems (TMS), and customer relationship management (CRM) platforms. Accordingly, the system automatically records every financial activity. The result? Less manual data entry, which means fewer labor and overhead costs and better consistency across departments.

Key features of 3PL accounting software include:

• Automated billing and invoicing: After analyzing warehouse activity, storage duration, transportation costs, and value-added services, the system automatically creates invoices that reflect those documents.
• Inventory cost tracking: The 3PL accounting systems monitor storage and handling costs in real time to support accurate pricing and profitability analysis.
• Multi-client management: The system lets you handle multiple client accounts, contracts, and billing terms at the same time.
• Customizable reporting: You can create and access real-time financial reports that combine logistics and accounting data for clearer insights.
• Integration with enterprise resource planning (ERP) and logistics tools: Most modern 3PL accounting systems seamlessly connect with systems like QuickBooks, NetSuite, or Logiwa’s cloud 3PL software.
• Audit and compliance tools: The system maintains complete, accurate records for tax reporting, audits, and compliance with industry regulations.

Why 3PL accounting systems are crucial for your business

When dealing with multiple clients and thousands of daily transactions, one mistake can lead to delays or, worse, billing disputes. Here’s how the right accounting system can minimize the challenges of 3PL billing:

• Streamline financial processes: Manual data entry can be time-consuming. This is especially true during peak season when people are more likely to be stressed and burned out, leading to higher rates of error. Automated accounting removes this problem by pulling transaction data directly from the warehouse and transportation systems.
• Ensure accuracy in billing and invoicing: Clients often pay for different services, like shipping costs, kitting fees, and value-added services. As such, their bills can vary a lot. If you calculate these bills manually, it’s easy to make mistakes, since there are so many variables. A 3PL accounting system comes with 3PL billing automation, which applies all these rules correctly, reducing the chance of disputes.
• Manage inventory and costs efficiently: 3PL accounting systems keep track of the true cost of your inventory, labor, and transportation. This means you’ll have the insights to price your services properly.

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How 3PL accounting systems benefit third-party logistics providers

Besides minimizing risks, the right accounting system provides other benefits for 3PL providers. These include:

• Enhancing operational efficiency: 3PL accounting systems automatically create invoices, purchase orders, and cost reports that reflect real activity. As such, teams reconcile fewer numbers, freeing up more time for higher-level operations.
• Real-time financial reporting: With instant access to data, decision-makers can spot trends like rising storage costs early. Team members can also make faster, more confident responses to cash flow or client demands.
• Improving cash flow management: Late payments can quickly strain your cash flow. Luckily, a reliable 3PL accounting system can prevent this by automating reminders, ensuring billing accuracy, and reducing payment delays. It also gives full visibility into receivables and payables, so you can forecast cash flow with better precision.

Choosing the right 3PL accounting system

Choosing the right 3PL accounting system can be difficult, with so many choices on the market. Focus on the following factors to narrow the options:

• Scalability: Pick software that grows with your client base and transaction volume.
• User experience: Choose an easy-to-use interface that both accounting and operations teams can learn and use easily.
• Data security and compliance: Your system should encrypt and store financial data in compliance with local and international regulations.
• Integration capabilities: Pick a 3PL accounting system that connects with your WMS, TMS, ERP, ecommerce platforms, and other logistics and financial tools for consistent data.

Best practices for implementing a 3PL accounting system

Once you’ve picked a 3PL accounting platform, follow these best practices to get full value from it:

• Map your current processes: First, outline your existing workflows. Note bottlenecks and customization needs. Use your notes to tailor the new system to eliminate bottlenecks.
• Clean your data: Check that client records, inventory lists, and billing terms are accurate before migrating them to the new system.
• Run pilot tests: Start with one client or warehouse to test integrations between systems and fix configuration issues early.
• Automate in phases: Gradually roll out automation like real-time reporting or invoicing, so teams can adjust smoothly.
• Train your team for success: Offer hands-on training and refreshers for accounting and warehouse teams. Encourage people to give feedback through surveys and town hall meetings.

The future of 3PL accounting systems

3PL accounting systems have powerful functionalities these days. AI and automation, for example, can now detect billing anomalies, predict late payments, and forecast demand-driven costs, giving finance teams more time to focus on analysis and strategy. 

Like a good deal of other software, many 3PL accounting systems have also migrated to the cloud. These systems stand out by offering:

• Remote access: Teams can log in from any location.
• Automatic updates: Providers handle upgrades and security patches, so you can cut IT costs.
• Scalability: With cloud systems, users can easily add new users, clients, or warehouses without major infrastructure changes.

If you’re looking for a cloud 3PL accounting system that has all of these features, rest easy knowing Logiwa IO will be able to seamlessly integrate with it. The result? You move faster, make fewer mistakes, and you get more time to focus on business building. You can also access other powerful logistics features, like AI-driven warehouse slotting.

Ready to see how a cloud-based solution can simplify your logistics accounting? Learn more about Logiwa IO  today.

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