With the concept of freight bill auditing and payment focused primarily on the US market, CTSI-Global recognized the potential for this solution outside the USA and has become a recognized leader for global freight audit and payment solutions.
As per our pledge, "A global vision, a local approach," CTSI-Global constantly develops its solutions and services in order to comply with the various billing systems around the world.
As part of this endless quest, CTSI-Global has created a Web-based tool that allows clients and carriers to integrate credit notes to our freight audit system, reducing the workload for all parties.
What is a credit note?
A credit note / credit memorandum / credit memo is defined by Wikipedia as "a commercial document issued by a seller to a buyer. The seller usually issues a [credit note] for the same or lower amount than the invoice, and then repays the money to the buyer or sets it off against a balance due from other transactions."
How do credit notes work?
What do shippers and logistics service providers (3PL's) do when they find an overcharge on a freight bill? The answer varies according to the country or region:
- The client short-pays the invoice. This means that if a USD $100 invoice has a USD $20 overcharge, then the client will only pay USD $80 to the carrier -- without asking further confirmation from the carrier. This process is standard business practice in the US.
- The client rejects the incorrect invoice. In some countries or companies, the invoice is sent back to the carrier with a note explaining why it needs to be reissued.
- The client asks the carrier to create a credit note. A credit note is an acknowledgement from the carrier that it overcharged the client. Once the client receives the paper or electronic credit note, it can be used like a voucher. If the overcharged invoice hasn't already been paid, the client can deduct it from the total amount. If the overcharged invoice has already been paid, the client can ask the carrier for a refund or can deduct the credit note from future invoices.
Credit note systems are usually in place in countries that have tax systems such as Value Added Tax (VAT) or Goods and Services Tax (GST). Credit notes generally have a number of legally required fields and need to be retrievable for a certain period. Criteria vary from one country to another.
CTSI-Global supports all types of overcharge systems identified above. We are the only freight audit company that is able to support an online solution for credit notes through our Web tool.
What does our Credit Note Tool do?
CTSI-Global's Credit Note Tool is part of our freight bill audit services and is available on-demand with the rest of our applications.
With this leading-edge tool, the carrier and client receive emails automatically whenever CTSI-Global identifies an overcharge. By simply following the link in the email, the carrier can generate an electronic credit note. The content of the credit note varies according to legal and business requirements and is established in agreement with the client during the carrier implementation phase.
If you have questions or would like to learn more, please contact our global team:
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What challenges have you faced when using credit notes to manage shipping overcharges? What questions do you have about the Credit Note Tool? Please share your comments.