The Role of an Analyst in Logistics Accounting

Logistics management analysts are all about streamlining operations to make manufacturing, storage, distribution, and shipping more efficient. They do this by using their knowledge of statistics and numbers to gather data and analyze it. They also handle other responsibilities, including preparing reports and entering logistics-related data into information systems or databases.

Analyze Customer Expectations

Managing the logistics of a business requires a keen eye for detail and constant evaluation. Ineffective logistics can lead to untimely deliveries, failure to meet client expectations, and, ultimately, a loss of revenue. Local regulations and guidelines set by authorities must be adhered to to prevent hefty financial penalties.

A skilled logistics accounting analyst can help companies avoid penalties by analyzing local shipping regulations and providing recommendations for compliance. Analyze and manage inbound truckload, less-than-truckload, and ocean freight. Reorganize shipping schedules to optimize loads, maximize vehicle usage, or limit the movement of empty vehicles/containers.

Evaluate logistics methods to reduce environmental impact. Establishing a clear picture of inventory levels is essential for companies in the logistics industry. Practical accounting can reduce warehouse costs and improve customer satisfaction by preventing stockouts and excess storage. Provide client visibility at key shipment/clearance milestones.

This way, clients are more likely to accept a delay in delivery or customs inspection as usual and may be less prone to challenge a charge if they understand the reasoning behind it. Develop processes that allow for a rapid remittance of freight bill payments. Develop scorecards and dashboards to give data visibility and interpretation to the business. Coordinate inventory management functions – including inventory tracking and warehouse management. 

Analyze Inventory Levels

Tracking inventory levels is a crucial aspect of logistics accounting. By regularly analyzing these metrics, businesses can improve efficiency, reduce costs, and ensure they always have customers’ desired products.

An analyst can use several methods to analyze inventory. For example, they may analyze gross margin return on inventory investments (GMROI) to determine which products are most profitable and to identify potential improvements to inventory management processes. They can also conduct reorder point analysis to identify optimal order quantities for each product and minimize inventory costs.

They can also conduct safety stock analysis to determine how much extra inventory a business should hold to mitigate risk or compensate for supply chain disruptions. An analyst can also analyze inventory by categorizing it into A, B, and C based on its importance to the company.

For example, an item essential to production could be classified as “A,” while items that aren’t critical can be classified as “B.” This technique helps companies streamline their ordering process and reduce inventory costs by identifying which products are most important to the company.

Analyze Supplier Performance

A logistics analyst can play a critical role in analyzing supplier performance. This can be at the level of an individual supplier or across the entire supply base. The latter case may involve assessing social responsibility, diversity, and sustainability goals.

It can also include assessing external risk factors that could negatively impact supply chain performance. In addition to performance metrics, the analyst can assess relationship health. This may involve measuring communication efficacy, the speed at which problems are resolved, and alignment to the business purpose. It can also measure contract compliance, such as adherence to price structures, delivery schedules, and quality requirements.

Other supplier analysis activities an analyst might be involved in include preparing reports on supply chain metrics and identifying potential opportunities to improve service levels or reduce costs. This might include a comparison of supplier economics (through return on capital employed, profit margin, and inventory turnover) with industry benchmarks.

Finally, the analyst can prepare and maintain databases for logistical information and identify efficiencies through database management tools. They can work closely with other members of the finance and operations teams to design new processes, remove waste, or reduce costs. This might include redesigning database and information technology capabilities, implementing process improvements, or creating tools to make data more useful.

Analyze Supply Chain Performance

A supply chain analyst analyzes data, monitors logistics, and makes strategic decisions to promptly ensure products move from manufacturers through warehouses and shipping lines. They often work in e-commerce, food and beverage, technology, and pharmaceuticals. They must be able to assess the performance of all aspects of logistics, from shipments and service levels to capacity use and cost management.

For example, comparing supplier pricing against current market conditions can help determine if there are opportunities to negotiate a better deal. Additionally, they need to analyze trends in logistics metrics such as on-time delivery and order accuracy rates to identify issues that could negatively impact customer satisfaction.

In addition, a strong understanding of e-commerce business models is beneficial to help online brands maximize profit potential and meet consumer demands. This requires coordination with multiple departments to implement changes in operational processes and communicate updates to the teams involved.

In some cases, this involves training staff to enable them to perform their jobs more efficiently. For logistic providers negotiating customs fees and clearance times, offering visibility into the operational process at key shipment milestones can reduce chargebacks and speed up remittance. Generating customized invoices and receipts also improves billing efficiency and reduces manual errors that can add to significant costs.