Cass Banking Operations Provide Funds Security in Freight Payment

Secure Financial Controls - an Imperative for Outsourced Freight Payment

The freight payment industry consists of two types of providers – regulated and non-regulated. The distinction is a critical one, but not always well understood. If you are a shipper, your freight payment partner must become a trusted steward of your funds. There is always risk when another company manages money on your behalf, and it is your job to minimize that risk. All shippers who use an outsourced freight payment service want and need to have the confidence that their funds will move from their bank, to their provider, to their logistics providers on schedule and without incident. In choosing a freight payment provider, your selection criteria should prioritize the safety of funds and fiduciary responsibility.

Payment providers with banking operations, such as Cass (Cass Commercial Bank is a wholly owned subsidiary), are highly regulated and audited, and therefore employ the necessary controls to protect client funds. The rules we comply with cover everything from safety of client funds to accounting policies, disclosure requirements, and corporate governance items such as the existence and makeup of a board audit committee.

Shippers who entrust large sums of money to any payment provider should insist on these bank-level controls. Not doing so creates significant financial exposure and supply chain risk if your payments to logistics providers suddenly cannot be made.

Providers who lack an internal banking infrastructure are not subject to bank examinations, are not bound to maintain required capital levels, and do not file regular financial statements available for public inspection.

Shippers can further mitigate risk by asking their freight payment provider for the following:

• Independently-audited financial statements, which you should request every six months. Their financial health is imperative. Keep a close eye on their capital position and profitability.
• Operational audit reports such as SSAE 18 Type II
• Full transparency to the movement of funds, so that you can always see, for example, scheduled payment dates vs actual payment dates
• Availability for on-site visits and audits

Shippers working with non-bank providers may also be able to reduce risk by keeping the actual payment function in-house. But this has some big downsides:

• Visibility and control are weakened when the closed-loop, invoice-to-payment cycle is broken.
• Efficiency provided through outsourcing is lost, including having a call center for carrier inquiries
• If your provider were to fail unexpectedly, invoice processing would come to a halt, as would supplier payments, creating real supply chain risk. 

As a financial holding company, Cass provides unique benefits in addition to safety. A built-in funds transfer system tightens the movement, security and tracking of payments. A comprehensive audit trail of all carrier payments provides clear visibility and timely information about payments.

The Cass freight payment solution creates documented, auditable policies, processes, and procedures to control and manage expenses and ensure that financial obligations are properly reported within your accounting systems and regulatory guidelines.

Cass is regulated in the U.S. by The Federal Reserve and in Europe by the Dutch Central Bank. We also trade on the Nasdaq, and our performance is widely distributed and available at all times.