Old Dominion Freight Line

Old Dominion Freight Line, Inc. (ODFL) is a leading less-than-truckload super regional carrier.  Through its non-union workforce and four operating groups (OD-Domestic, OD-Expedited, OD-Globaland and OD-Technology), Old Dominion offers an array of innovative products and services and provides complete 50-state coverage and international services around the globe.

ODFL’s Vice President of Information Technology, Ken Erdner, describes the organization’s original process for handling remittances, and what caused them to evaluate automation solutions:

“We had a pretty efficient manual process; 400 (remittances) per hour is what they were averaging.  What we would do is, as soon as we’d get the remittance from the bank, and it was scanned and everything, we’d have to print that remittance off and we would key it in based on what the remittance looked like, key some check data in, things like that.  The people doing it were very good, but our business kept growing, and as the business grew you’d have to add people all the time.”

“We have the check number; that’s the first thing that comes through, so we get a check number tied to it.  We already have money in the bank from the check; they’ve paid and it’s in the lockbox.  Now it’s a matter of getting the ‘pro’ (remittance) so that it will reflect that the customer has paid those pros.  One thing we did have trouble with is that because we were behind, especially on the weekend, it would take us a couple days to get out, so if they got their payment in on Friday, we might not get it keyed in until Tuesday.  If we invoiced or they checked online to see where they stood, it will say they didn’t pay when they did, and it’ll lead to a call.  It may even cause another invoice to go out that says, you owe this money, when they really didn’t, because it wasn’t done.”

After implementing Brainware, Erdner notes that they are “current—in fact, we’re processing before anyone even comes in in the morning, and so eighty percent of those remittances are handled before we’ve even walked in the door.”

“We looked at a number of products, and one of the things that helped us to determine Brainware would be the best fit for us was, when we were running our tests, we seemed to get an awful lot that automatically processed; right off the bat, we were getting forty percent going through without any exceptions, which we thought was pretty high.  Currently, we get about eighty percent going through without any exceptions, so that’s a great improvement, but right off the bat, we saw this could be good and we could get at least twice as much productivity.”

In fact, the accounts receivable has boosted its productivity by 400-500%, from processing 400 remittances hourly to regularly observing 2,000 in an hour.  These remittance documents are exported into the system where Distiller will validate the information against the known data sources in AS400 and SAP.  It’s able to do this at the line-item level, even if there is not an exact match, by utilizing “fuzzy” logic that is truly unique to Brainware.

“We’re putting about seventy percent of our remittances through Brainware, and of those, almost eighty percent go automatically, right through the system, so we’re only handling twenty percent of that seventy percent to verify why something didn’t get paid; it could be a valid reason, but it didn’t match up perfectly.  But despite that, we’re getting four to five times the productivity that we had with what we thought was a good manual system.”

While ODFL not only surpassed their productivity goal, they also now have unparalleled control of their working capital and are able to gain immediate visibility into their cash inflow in real time.  This helps the company better manage their cash position, and also improves their customer service as well.

Accuracy and accountability are critical in the trucking industry because any customer’s shipment might be flagged and delayed due to late payment of their previous bills.  Because Brainware Distiller is able to capture remittance and payment information as soon as it enters the business, these delinquent accounts can be cleared at the earliest possible moment, releasing their shipment.  This earns ODFL additional revenue that much sooner, and helps them maintain their exemplary customer service.

Erdner discusses the importance of getting all affected departments on board with such an implementation project:

“Some of the people would see it as a threat because all of a sudden, it’s going five times as fast as what you’d had, so you have to get people on board and make sure that they’re cognizant of what the goals are and where you want to go.  The Controller was definitely on board with it; he understood that the more our company continues to grow, you can’t add people constantly.  You must continue to automate.  As a result of all the automation that we’ve deployed, we’re using the same number of staff members in accounts receivable today as a $1.5 billion company (approximate 2010 revenues), as we did as a $200 million company, so it really has performed well.  Our continuous improvement in this area is obviously driven by several initiatives, but Brainware is a key element of keeping our AR staff at an effective and efficient level.”

“I think we’ve had good success.  Getting stuff done quicker is helping us; it’s gotten rid of our temporary help, and we’ve been able to put a quality product in there.  When you’re doing four or five times what you did with a good process previously, and it’s really making a big difference in the company because it’s allowing us to grow without having to add permanent employees—it’s really a good thing.”

Erdner describes his experience with Brainware’s project team and customer service:

“We interacted quite a bit when it was starting out because it was a new application, and we had good technical help that seemed to stay on top of things as we got going.  Some of the typical things you’ll have is that you’ll fix something over here and it’ll change something over here, and once we call those issues all worked out I think things went really well.  Going forward, since the application has settled down, we’re really putting it in, and have had limited issues.  It’s gone well and I have not heard anything about Brainware support in a negative fashion at all.”

Sandy Yost, ODFL’s Technical Lead Applications Development Manager and a direct Distiller user, discusses her experiences with Brainware for accounts receivable:

“When we set out, we had eight cash posters, and now we only have four because eighty percent of remittances going through Brainware complete automatically, without anyone even having to touch them; they feed straight into our AP system.  It’s wonderful.  It has been a very good cost savings for us, in terms of being able to decrease the things we have to process, enabling us to reduce headcount rather than expand it.”

Erdner discusses plans to expand ODFL’s Distiller application to their Bills of Lading (BOL) entry process:

“It’s going to be a lot more difficult, but we felt the remittance processing was a lot more streamlined, a little easier to do, and that’ what we wanted to do first.  Although it’s saved us a lot, it’s also kind of a test to see where we go with the next step, and we’re hoping to move on to our bill entry group next.”

Brainware CEO Carl Mergele discusses the value proposition for operations like Old Dominion Freight Line when they automate their remittance processing with Distiller: