How to Do 3PL Billing Management Right

In a recent survey by Dext, 56% of accountants said they spend too much time on manual tasks, and 39% said they spend over half their day on manual work.

Now, let's take a close look at how this plays out in the world of third party logistics. Your "invoice" is more than just a static document - it's a detailed monthly account of what went on in the warehouse: work we took in, things stored, jobs sent out, shipping costs, and it's worth keeping an eye on those quick value added services that always seem to multiply. When that account is reassembled from exports, email threads and manual data entry, billing errors are just a matter of time - not about you being inept.

So let's talk about what "doing 3PL billing right" actually means, not in theory - in the real world of multiple clients, shifting billing rules and tight billing cycles where the cash flow is depending on getting invoices out the door quickly.

Why 3PL billing starts to go wrong at scale

Most 3PLs don't struggle with creating an invoice. It's consistently taking the work we've done and making sure it shows up on the invoice that's a problem.

I see a pattern over and over in logistics companies:

Your team executes their work perfectly - but the data behind that work gets split across different systems already in use. The Warehouse Management System captures bits of the workflow, carrier tools handle shipping costs, value added services get tracked in a shared spreadsheet and finance tries to put it all together later. And that "later" is where the manual billing processes start to creep in.

Once manual processes take over, the usual problems start to appear: tiny gaps become lost revenue, mismatched rates become billing disputes and the invoicing process slows down because someone has to check to make sure what actually happened. And it often looks like a client relationship problem when really it's a problem with your billing system design.

Accurate billing starts on the warehouse floor

Here's a simple principle: if your invoice isn't accurate then it doesn't reflect what actually happened in the warehouse. And that means your billing needs to be rooted in the same place your work is actually done, your Warehouse Management Systems and the operational data they produce.

When you're using real-time data (receipts, picks, packs, shipments, movements, times, zones, units) to drive your billing then you're not trying to "reconstruct" a billing period, you're taking the events as they happened and turning those into invoice lines.

That's what billing automation should mean in a 3PL context - not a fancy invoice template, but an automated billing system that can reliably capture the billable services and apply the right billing models.

The bit most 3PLs get wrong: defining billable events

"Billable" isn't just about outbound picks and packs,  the margin leak is usually hiding in the gaps:

Storage exposure that's tricky to work out consistently, partial services that happen in bursts and value added services that don't look significant until you count them over a billing period. And the more your operation grows the more these events are going to happen - and the more danger there is in relying on manual data entry to catch them.

This is why good 3PL billing starts with clear definitions:

What exactly counts as a billable event for this client? What data proves it happened? What's the rate? And what's the rule when things get messy (rework, exceptions, cancellations, rush handling, split shipments)?

Once those billing rules are clear, you can design billing workflows that don't rely on guesswork.

Common billing models

Most third party logistics providers use a mix of billing models: per unit, per order, time-based services, storage fees, administrative fees, pass-through shipping costs and maybe a base retainer.

Nothing wrong with that - it's consistency that's the problem.

Billing breaks down when the model depends on data you don't reliably capture. If you bill storage fees on "average occupancy" but you only have snapshots, invoices become dubious. If you bill value added services but the service data lives in someone's notes, you'll either miss out on charges or create friction. If shipping costs are passed through but not tied to the shipment data cleanly, disputes are all but guaranteed.

And disputes aren't just annoying - they drag billing status into limbo and slow down cash flow. You can run a perfect warehouse and still lose momentum financially if invoicing gets stuck in a back-and-forth.

What "doing it right" looks like: one smooth flow from ops to invoice

When you step back, 3PL billing done right is surprisingly straightforward. It's three connected bits:

First you capture the operational reality (real time data, operational data, service data).

Second you apply billing rules consistently (per client, per billing period).

So the really interesting bit here is that the actual automation part of billing is only one part of it - the rest is just about making sure everything is connected and running smoothly.Third, you create invoices that are easy to understand and actually stand up to scrutiny (accurate invoicing, precise billing - and a heck of a lot fewer billing disputes to deal with).

That's how you shift from plodding along with slow billing cycles and trying to keep your head above water, to having a billing system that actually works as it should.

Where lots of teams get it wrong with billing software

Most teams go out and buy billing software hoping it will just magically sort out all their billing woes. But if the system doesn’t tie in properly with the way you do work on the ground - you just get a fancy new interface slapped on top of your old manual billing processes.

The right billing software for a 3PL needs to do a particular job: it has to turn the work that's going on in the warehouse into billing data, without you having to manually translate it.

In other words, it needs to be able to capture what you’re charging for in a way that just makes sense, given the way your logistics system works - and then make the results something your financial team can actually use.

And yeah, your finance stack is pretty important here. If you're pushing your invoice outputs into accounting software, or out to a whole lot bigger accounting system, or even an enterprise resource planning system - the billing output needs to be in a format that your financial team trusts as actual financial data. Otherwise, you’re just shifting the problem from billing to accounting, just later on.

Implementing an automated billing system without completely messing up operations

The best way to do this isn't actually to just "automate everything at once". It's more like, breaking the process down into layers and implementing the billing automation bit by bit.

Start off with one client where you already know the rules, and then expand from there - your early wins are usually going to come from sorting out those repeatable charges that are causing the most noise - storage fees, outbound handling, value added services and all those recurring administrative fees. Once those are sorted, you've got the foundation to scale up and do more with other clients, without having to multiply the manual processes you're trying to get rid of.

Over time, this all becomes about continuous improvement: fewer and fewer adjustments to make, fewer disputes, faster invoice generation, and a lot more consistent billing accuracy. And as soon as you can start sending out timely invoices with confidence, you'll start to feel the operational benefits - not just in finance, but in client satisfaction and your relationships with your clients.

Where PULPO fits in

If you want to turn this stuff from some abstract theory into something your team can actually use on a monthly basis without having to resort to spreadsheet firefighting, PULPO’s 3PL Billing Software is exactly the ticket. It connects billing up to what's actually happening on the ground in the warehouse, so your billable activities don’t get lost between systems, your client-specific billing rules stay consistent across billing cycles, and your invoices are actually based on real operational data, not just manual data entry. The result is a whole lot simpler month-end closing, fewer billing disputes to deal with, and a lot more predictable cash flow - without forcing your team to go back to manually billing every month.

With PULPO’s 3PL Billing Software, you can use operational data to reduce human error while creating invoices, prevent billing disputes, and keep financial operations aligned with the real actual costs behind your essential services—so you avoid inaccurate invoices, unlock cost savings, and accelerate cash flow.