It’s no secret that transportation management is struggling. Supply chain costs are up and transportation is taking the brunt of it. Not only is the cost of fuel rising and continuing to fluctuate rapidly, but employee salaries and the manufacturing side of the supply chain are also extremely high.
Many companies are turning to third party transportation and supply chain management companies in order to reduce the burden of their constantly changing profit line and insights into how to reduce inflationary pressures.
These management companies have better tools and more experience, and also take away the large headache of predicting, analyzing, and managing a constantly changing transportation and supply chain for otherwise busy organizations.
FreightWise is one example of a supply chain management company where business is booming. FreightWise is a cloud-based supply chain logistics company and they have been on the Inc. 500 list of America’s fastest growing private companies for three years in a row (including the No. 2 spot in 2019).
FreightWise integrates with clients' existing infrastructure to reduce shipping time and resources while simultaneously solving challenges in clients’ visibility, optimization, manual processes, and cost.
The Nashville, Tennessee based company was founded in 2016, and really took off over the past few years – in part due to the increased options of analytics and automation, and also due to the market uncertainty and constant changes of the past two and a half years.
But with the increase in customers and complicated data came the problem of improving their own analytical processes.
In comparison to the age old saying of “who will guard the guards”, is the finance team’s saying of “Who will provide analysis for a supply chain analytics company?”
Using FP&A solutions to increase analytics
FreightWise went shopping for an FP&A solution and went with Datarails, an Excel based FP&A software that is meant for growing SMBs – exactly fitting the description of FreightWise. Their financial processes improved tremendously and they were able to save time, increase analytics, and most importantly focus their efforts on the pain points of their business.
The problems: Rigidity and slow processes
The biggest problem that the company found was that the company’s existing financial reporting and planning processes were just not flexible enough for a fast-growing company like FreightWise. The list of outdated processes and problems was quite long:
The financial reporting was extremely limited.
Reporting, budgeting, and forecasting processes were extremely time consuming.
Everything required far too much manual work.
The data for specific reports had to be input based on the exact structure of the general ledger.
The results were too rigid for a fast moving company that provides services in a fast moving environment.
Solution #1: Financial reporting that structures data your own way
FP&A solutions take care of all of these problems and roadblocks, as data can be structured in any format for any report, no matter how the source data is structured. For example, FreighWise could then view an expense report in two different ways – both as an operating expense on a financial report as well as rolled up into “other expenses” on a management report.
In addition, the data became far easier to access in any format which increased problem solving time and reduced manual efforts of moving and changing data from different sources.
“We’re growing, so I’ve got to have the flexibility that the company needs to do that financial planning,” Bradley McKnight, CFO of FreightWise said. “What is next month going to look like, or what is next quarter and next year going to look like. I really could not do that very frequently before using Datarails, and now I can.”
Solution #2: More accurate Sales
FP&A solutions don’t just help the finance team, they also contribute analytics to the rest of the company, including sales. Datarails allows the finance team to track the contribution margin from the sales team on an individual basis which gives the sales team leaders clear goals.
This helps sales managers understand the performance of specific account representatives, leading them to identify weaknesses and give them the tools to better close new clients.
In addition to predicting more accurate general sales figures, it also greatly helps with forecasting sales as it gives detailed information about deal size and prospecting rate which helps predict profit and churn rate more effectively. In a time when a couple of percentage points here and there makes all the difference in decision making, more accurate sales forecasting was a big contributor.
“Once I was able to give management that kind of data, they were making better business decisions, whether it’s hiring or how are we spending our money,” said McKnight.
Solution #3: Faster budgeting and forecasting
Before implementing Datarails, FreightWise had 20 cost centers making budgeting and forecasting a tedious and time consuming manual process. If the company wanted to make even one change in head count, the finance team had to manually key in changes in the ERP for each affected cost center in order to get to the department level data that was needed. It used to take at least 8 hours just to get a budget comparison on the department level!
FreightWise needed a more dynamic budgeting and forecasting process to keep up with their dynamic business environment. Using Datarails has made it possible for FreightWise to implement agile and robust financial planning, through a flexible budgeting and forecasting process that reflects the latest changes.
“The flexibility to make changes easily is something I didn’t have before,” said McKnight. That is crucial to FreightWise because it’s such a “dramatically growing new company,” he said.
All in all, FreightWise’s finance team was able to provide more advanced and accurate analytics to management. This led to an impressive 733% three-year growth in 2021.