Driving a shorter revenue cycle with interline settlement software
Interline shipments are an integral segment of the rail transportation industry, comprising a significant amount of business revenue in a railroad. It goes without saying that increasing the cash flow of interline shipments by streamlining the settlement process can yield higher business revenue for a company.
However, despite the hefty impact of these settlements on the business, current processes for managing settlements are incapable of reducing working capital requirements, overdue and outstanding claims, and shortening the dispute resolution cycle. Most Class I, II and III railroads are incapable of accelerating the process of revenue recognition. What this directly translates into is a lengthy cycle and longer time-to-cash, which means that you have less cash flow to invest in critical capital expenditures.
With a sophisticated, intelligence interline settlement system (ISS) in place, your railroad can effectively drive a shortened revenue lifecycles and increase their cash flows with interline settlement software. This enables you to acquire a competitive business advantage and unlock new business opportunities.
The challenges of managing legacy interline settlements
Transacting interline freight revenue settlements through RailInc Central Interline Settlement System (CISS) has been the set path for decades now. However, traditional, legacy interline settlement process are manual and therefore, inflexible. While they may have worked well at one point in time, they are not adaptable to the increasing volume of settlements that a growing business manages. This translates into inefficiencies in complying with Railway Accounting Rules (RAR), slower cash flows, and a lengthy revenue settlement cycle.
Some additional challenges faced by railroads due to traditional, manual ISS:
- Delayed settlement period, ranging between 60 days to one year to resolve
- Manual workarounds to meet concurrence, resulting in a hampered dispute resolution capability
- Overcharge claims that exceed the CISS-prescribed resolution timeline
- Manual retrieval of revenue waybills and pricing details of enormous volumes of interline shipments
- Physical audit accounting, which results in excessive time consumption
- Little or no data visibility which impedes dispute resolution
- Dependency on the technical department to acquire data, which usually lacks report interpretation and is present in disparate formats
- Frequent downtime of older mainframe-based systems and limited IT support expertise to service these legacy systems
- Inability to determine the source of revenue leakage
How can innovation in the interline settlement process help?
With a lack of automation and analytics, most Class I, II, and III railroad companies resort to daunting, time-consuming paper-based data entry that dramatically cripples their business operations. This is where innovation and digitalization step in to tackle transform the status quo.
By employing next-generation interline settlement systems, railroads can bring about the digitalization of interline revenue settlement processes. It’s a critical must-have to curtail the revenue cycle at large and to accelerate cash flows. As railroads need to fund capital expenditures by converting revenue into cash flows, this can pose a huge advantage for them.
With a modern ISS, you are looking at increased data visibility and flexibility into the settlement procedure, along with its automation. You can optimize the settlement process, streamline the workflows, and enable your enterprise to escalate business processes quickly. These operations include settlement dispute mitigation, acceleration of revenue interline settlement cycles, and adherence with RAR and Rate EDI Network (REN). This allows you to collect cash from the customer and address accounts receivable and disputes quickly.
Adopt digitally powered interline settlement software to drive better business gains: The rail industry digitalization roadmap
The evolution of the rail industry towards an increasingly digitalized mode of operation has facilitated an industry-wide adoption of ICT technologies and solutions, including IoT (Internet of Things), automation, robotics, cloud computing, and big data analytics. By encouraging innovation, railroad enterprises can trigger and leverage the momentum to build scalable, elastic, and robust business processes for profitable operations.
Incidentally, critical, revenue-related procedures like interline settlements can improve the company’s performance and enables it to disrupt the competitors through digitalization. Looking ahead at an ISS software application, we’ll see the following technologies leveraged:
Integration readiness: Software with open APIs allow you to integrate the solution with your existing business architecture (ERP, revenue management system, and CISS), ensure business system continuity, enable access to revenue-related data.
EDI messaging: Interfacing with Railinc CISS is necessary in order to transmit bulk EDI messages. ISS software should ideally come equipped with the abilities to construct, transmit, verify, and validate EDI messages like 426, 864, and 997 in a Rate EDI Network (REN) compliant environment.
Role-based dashboards: Mainframe and .NET applications don’t offer dashboards to make the settlement process intuitive to manage. Dynamic, role-based dashboards define access credentials and allow executives, admin, and analytics alike different drill-down views into the settlement process and pre-defined dashboards configured for each user.
Reporting capabilities: This ideally works best if you’ve migrated your data from an on-premises location to a cloud location like a data warehouse. Within your ISS software, you can build out pre-defined as well as dynamic reports for specific data and parameters.
Tolerance configuration: Define and set up tolerance tables and threshold in order to automate concurrences, display waybills under tolerance IDs for quick comparison, and create customized tolerances for specific partner carriers. This means that if a settlement occurs outside of the threshold set, the system checks the tolerance table and identifies the correct tolerance for that waybill or settlement, categorize the waybill into the specific dispute, and either an opinion or concur.
Automation of settlements: If your railroad processes a large volume of shipments, this is a must-have feature. Automation of settlements means that your workforce is not pouring time and resources to resolving disputes manually. instead, you can set up parameters that define whether the system should raise an opinion or concur. This will help you improve performance and decrease the change of human-related errors occurring.
Elastic and saved search capabilities: Elastic search capabilities give users the ability to search for information like waybill data within seconds. Searches are conducted within a in-memory database that gives you faster results. These searches could also be saved in a dashboard for future use.
Workflow prioritization: Put the days of time-consuming settlement processing via Excel sheets behind you. Flagging capabilities allow users to shift priorities as needed, bookmark tasks, and assign them to different departments if needed.
Leverage CloudMoyo Interline Settlement System (ISS)
Looking to replace you existing legacy or mainframe-based manual systems? Leading railroads are adapting CloudMoyo Interline Settlement System to digitalize the entire interline settlement process, part of a critical move to streamline revenue-related functions within the enterprise. A SaaS solution, CloudMoyo ISS effectively drives business value by automating dispute resolution and revenue settlement processes, especially for interline freight rail shipments.
You can watch our on-demand webinar with Kansas City Southern Railway here to hear about they are adoption CloudMoyo ISS to drive innovation in interline settlements.
Our modern, cloud-based ISS enables certified ISS participation by interfacing with RailInc CISS and railroad partners. You can harness the power of several capabilities from the centralized, cloud-based interline settlement software, and yield the following advantages:
- Shorter revenue lifecycles
- Enhanced throughput and dispute mitigation to reduce disputes
- Accelerated revenue recognition
- Upgradation of the comprehensive quality and efficiency of the interline settlements
- Achieve up to 97% concurrence in the very first interline shipment settlement
- Gain role-based access into the settlement data
- Establish a REN-compliant environment
Get in touch with us today to achieve consolidation of new business models, alongside the establishment of emerging technologies, with automated cash flows and shorter revenue lifecycles. Witness soaring business numbers by investing in a digital, cloud-based next-gen ISS.
Opportunities for digitalization in railroad contract management
Date: Tuesday, December 8, 2020 | Time: 10 am PST
CloudMoyo empowers rail and transportation companies to gain greater insights, unlock efficiencies, and improve agility in operations, revenue and asset management as well as critical areas of safety, crew scheduling and maintenance. Combined with deep rail industry expertise, our cloud-based, AI-driven solutions leverage cutting edge technology to reimagine railroad digitization.
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