Fulfillment 101: The Warehouse Invoice

The relationship between brand and fulfillment provider is built on a number of things: trust, experience, technology, support, data, performance and yes… documentation. 

One of the most crucial documents is the warehouse invoice package. 

In the truest sense, a warehouse invoice is a bill for services rendered in a calendar month that the fulfillment provider sends to the brand. But there’s more to it than that. The warehouse invoice is about visibility. It’s about transparency. And it’s about eliminating surprises.

The Anatomy of the Warehouse Invoice

There are two parts to the warehouse invoice package: the summary of charges and the supporting documentation. The summary aggregates changes by service type: orders, fulfillment, shipping. Think of this as the macro view. 

At a micro level, the supporting documentation covers all activity: every single order, how orders are classified, charges for each individual order, value added service charges, surcharges at the order level and everything else specified in a given contract. The supporting documentation tells a story that helps brands monitor performance against cost. It helps accounting and finance teams make payments and analyze results. Operations teams frequently use it to guide inventory decisions. 

Oftentimes, this level of detail can overwhelm those receiving it. At Capacity, our Finance Account Management (FAM) Team walks through the warehouse invoice each month until our clients feel comfortable digesting it independently. And even once they reach that point, we’re always just a phone call or email away! Anytime a client wants to walk through a warehouse invoice – or anything for that matter – we’re here for it.

Optimizing the Warehouse Invoice: How Brands Can Help

Brands can play a role in ensuring that the warehouse invoices they receive from their fulfillment provider are predictable and surprise free. Capacity Director of Finance, Kristina Crockett, shares her tips.

Keep Your Case Packs Updated

For brands that have fulfillment contracts that include both piece and case rates, they need to make sure that their case packs are accurate. This is extremely important to ensure that the correct charges are billed for that order. It comes down to simple math: We take the number of units divided by the provided case pack to arrive at the correct number of cases to bill for the order. As we all know, bad data leads to bad results so we recommend that clients take the time to periodically check the case pack information in their Client Center. If there are changes that need to be made, our Client Services Team is available to help you make the necessary updates.

Order in Case Pack Quantity

Ordering in case pack quantities reduces the likelihood of your fulfillment partner needing to break cases. Breaking cases impacts billing and operations.

Monitor Your Inventory

This is huge. Since most 3PLs bill Storage charges, brands must stay on top of their inventory to manage costs. It's your inventory ... manage it responsibly!

Know Who Should Pay for Noncompliance Charges

Noncompliant receiving charges are those ugly charges that appear on the warehouse invoice when a shipment is received at the warehouse packaged incorrectly or lacking critical information. This prevents our receiving team from processing the goods into inventory. Manual intervention is then required to remediate and receive the inventory. Noncompliant receiving charges represent the labor and materials required to get the shipment within our receiving guidelines and available for use by our customers.   

But more often than not, the brand should not be the one footing the bill for noncompliant receiving. In the event of a noncompliance violation, the brand can usually bill back the charges to the supplier or vendor at fault and avoid paying for their mistakes. Our receiving guidelines are the enforcement mechanism. Brands need to make sure that their vendors and suppliers have an up-to-date copy of these guidelines. We always provide them and are happy to again and again.

Yes, The Warehouse Invoice is How 3PLs Get Paid...

But they're really about strengthening the 3PL - brand relationship. By providing a high-level overview of the month's activity and a super - detailed drilldown, we're able to show brands the big picture and all of the details - all at once. Visibility... Transparency... That's how we build trust.