Understanding 3PL Billing Complexity
Third-party logistics billing differs significantly from standard retail billing. Rather than charging for products alone, 3PLs must track and bill for multiple distinct services:
Receiving: Charges for accepting and processing inbound inventory (typically per pallet or unit)
Storage: Charges based on the cubic footage or volume of space occupied by each customer's inventory
Picking: Charges for selecting items from inventory to fulfill orders
Packing: Charges for preparing orders for shipment
Shipping: Charges for carrier services and related fulfillment activities
Each activity has associated costs and must be billed appropriately. ShipSidekick's billing system is purpose-built to handle this complexity, capturing data as work happens in your warehouse and generating accurate invoices without manual calculations.
How Billing Profiles Work
The Billing Cycle
ShipSidekick processes billing on a scheduled, automated basis:
Daily Processing: The system runs two core billing operations every day:
Manage Invoices V2 runs at 4:00 AM UTC, calculating and aggregating charges based on your configured billing profiles and rules
Issue Invoices runs at 5:00 AM UTC, finalizing and issuing invoices to your clients
Automatic Charge Calculation: As your warehouse team completes activities—receiving inventory, storing goods, picking items, packing orders, and shipping packages—the billing system automatically calculates charges based on your configured rates.
Active Billing Profile: The system uses the "active" billing profile for each organization to determine which charges to add to running invoices. Only one billing profile is active at a time per organization.
Audit Trail: All transactions are logged for complete visibility, allowing you to reconcile expected charges against actual billing.
The Digital Wallet (Prepayment Model)
ShipSidekick offers a digital wallet feature that functions as a prepayment mechanism:
Upfront Deposits: Clients deposit funds into their wallet, making those funds available to cover 3PL service costs
Automatic Deduction: As warehouse activities are completed, charges are automatically calculated and deducted from the wallet balance
Nightly Settlement: Fund depletion is calculated automatically during nightly billing processes, ensuring balances always reflect the current state of the account
Seamless Operation: This eliminates manual invoicing delays and ensures billing is tied directly to work performed
Setting Up Your Billing Profiles
Step 1: Create Location Types (Before Billing Setup)
Before configuring your billing profiles, you can create location types that will be referenced in your rate structures. Location types categorize your warehouse storage locations for billing purposes.
You can create location types ahead of time, such as:
Small Bin
Medium Bin
Large Bin
Pallet Rack
Floor Storage
When you create your billing profiles later, you'll reference these existing location types in your rate configurations.
Step 2: Access the Billing Dashboard
As a 3PL administrator, access the billing system through ShipSidekick's admin dashboard:
From your main menu, navigate to Billing
Select Billing Profiles to view and manage your configurations
The billing subsystem integrates with your wallet and invoice management tools
Step 3: Configure Rates for Each Warehouse Activity
When setting up a billing profile, you'll define rates for all standard 3PL services:
Storage Billing
Storage is typically the foundation of 3PL billing:
Measurement Method: ShipSidekick tracks inventory volume using cubic measurement, giving you precise data on how much space each customer's inventory occupies
Rate Structure: Define your storage rate (e.g., $X per cubic foot per month)
Location Type Pricing: You can set different storage rates for different location types (e.g., premium rates for climate-controlled storage vs. standard warehouse space)
Billing Frequency: Specify whether storage is billed monthly, weekly, or on another cycle
Receiving Billing
Configure charges for inbound inventory processing:
Unit of Measure: Define whether you charge per pallet, per unit, per shipment, or another metric
Rate: Set your receiving rate based on your chosen unit of measure
Processing Tiers: You may configure tiered pricing if receiving costs vary by volume or complexity
Picking Billing
Set rates for order fulfillment picking activities:
Per-Item Picking: Charge per individual item picked from inventory
Per-Order Picking: Alternatively, charge a flat rate per order picked
Volume Discounts: Configure tiered rates if picking costs decrease at higher volumes
Packing Billing
Define charges for order preparation:
Per-Order Packing: Charge per order packed
Per-Item Packing: Charge per individual item packed
Material Surcharges: Add additional charges for special packaging materials if applicable
Shipping Billing
Configure charges for carrier services and fulfillment:
Carrier Integration: ShipSidekick integrates with multiple carriers, and billing profiles capture shipping charges from these integrations
Surcharges: Define any additional surcharges (handling fees, special services, etc.)
Rate Caching: The system uses immutable cached rate charts per carrier account, service, weight, and zone to ensure consistency
Step 4: Define Billing Rules and Invoice Generation
When creating a billing profile, specify:
Billing Frequency: How often invoices are generated (daily, weekly, monthly, etc.)
Invoice Generation Rules: Which activities and charges are included in each invoice cycle
Payment Processing: Configure integration with Stripe for payment processing
Client Assignment: Assign the billing profile to specific customer organizations
Step 5: Activate Your Billing Profile
Once configured, activate your billing profile:
Only one billing profile can be active per organization at a time
The system uses the active profile to determine which charges are added to running invoices
You can switch between profiles as needed without disrupting billing operations
Managing Billing Profiles
Switching Billing Profiles
You can switch billing profiles in the middle of a billing week or cycle without issues:
The system seamlessly transitions to the new active billing profile
Charges are calculated based on the active profile at the time the work is performed
Recent shipment activity does not prevent profile switching
The transition is handled automatically by the billing system
Deleting Billing Profile Assignments
If you need to delete a billing profile assignment that has had recent shipments:
No Issues Expected: The system is designed to handle this smoothly
Historical Data Preserved: Previous charges and transactions remain in your audit trail
New Profile Assignment: Simply assign a new active billing profile to the organization
Seamless Transition: The system will use the new profile for all subsequent charges
Monitoring Billing Activity
Track your billing operations through:
Transaction Logs: View all billable activities and their associated charges
Invoice History: Access issued invoices and payment records
Wallet Balance: Monitor client wallet balances and fund depletion in real time
Audit Trail: Review complete transaction history for reconciliation and compliance
Examples
Example 1: Basic 3PL Billing Profile for a Small Warehouse
Organization: ABC Fulfillment Services
Warehouse: Single location with mixed storage types
Billing Profile Configuration:
ActivityRateUnitReceiving$2.50Per palletStorage - Standard Bin$0.50Per cubic foot per monthStorage - Premium Bin$0.75Per cubic foot per monthPicking$0.25Per itemPacking$1.00Per orderShipping Handling$2.00Per shipment
Monthly Charges for Customer "XYZ Corp":
50 pallets received: 50 × $2.50 = $125.00
500 cubic feet standard storage: 500 × $0.50 = $250.00
100 cubic feet premium storage: 100 × $0.75 = $75.00
2,000 items picked: 2,000 × $0.25 = $500.00
300 orders packed: 300 × $1.00 = $300.00
300 shipments: 300 × $2.00 = $600.00
Total Monthly Invoice: $1,850.00
The system automatically calculates all these charges as activities occur, with no manual spreadsheet work required.
Example 2: Multi-Location Billing with Tiered Pricing
Organization: National 3PL Network
Warehouses: 3 locations (East, Central, West)
Billing Profile Configuration:
Picking Rates (tiered by volume):
0–1,000 items/month: $0.30 per item
1,001–5,000 items/month: $0.25 per item
5,001+ items/month: $0.20 per item
Storage Rates (by location):
East Coast: $0.55 per cubic foot (premium location)
Central: $0.45 per cubic foot (standard)
West Coast: $0.50 per cubic foot (standard)
Customer "LargeRetailer Inc." picks 8,000 items across all locations in a month:
Tiered picking rate applies: 1,000 @ $0.30 + 4,000 @ $0.25 + 3,000 @ $0.20 = $1,300.00
Storage at East: 200 cu ft × $0.55 = $110.00
Storage at Central: 400 cu ft × $0.45 = $180.00
Storage at West: 300 cu ft × $0.50 = $150.00
Total Monthly Invoice: $1,740.00
Example 3: Digital Wallet Prepayment Scenario
Customer: "QuickShip Retailers"
Wallet Balance: $5,000.00 (prepaid funds)
Daily Activity:
Day 1: 10 pallets received ($25.00), 1,000 items picked ($250.00), 50 orders packed ($50.00) = $325.00 charged
Day 2: 500 cubic feet storage ($250.00), 800 items picked ($200.00), 40 orders packed ($40.00) = $490.00 charged
Day 3: 10 pallets received ($25.00), 1,200 items picked ($300.00), 60 orders packed ($60.00) = $385.00 charged
Nightly Billing Process (after Day 3):
Total charges: $1,200.00
Wallet balance deducted: $5,000.00 − $1,200.00 = $3,800.00
All transactions logged for audit visibility
The customer's wallet automatically reflects the current balance, and they can monitor fund depletion in real time.
Frequently Asked Questions
Can I switch billing profiles in the middle of a billing cycle?
Yes, you can switch billing profiles at any time, even in the middle of a week or billing cycle. The system uses the active billing profile to determine which charges are added to running invoices, and the transition happens smoothly without disrupting billing operations.
What happens if I delete a billing profile assignment that has recent shipments?
There are no issues with deleting a billing profile assignment that has had recent shipments. The system is designed to handle this smoothly. Your historical data and previous charges remain in your audit trail, and you can simply assign a new active billing profile to the organization. The system will use the new profile for all subsequent charges.
Can I create location types before my billing setup is complete?
Yes, absolutely. You can create location types (such as "Small Bin," "Medium Bin," "Large Bin," etc.) ahead of time. When you create your billing profiles later, you'll simply reference these existing location types in your rate configurations.
How does the digital wallet work?
The wallet functions as a prepayment mechanism where clients deposit funds upfront. As your warehouse team completes activities, the billing system automatically calculates charges based on your configured rates and deducts them from the wallet balance. This happens seamlessly in the background, with all transactions logged for complete audit visibility. Fund depletion is calculated automatically during nightly billing processes, ensuring the balance always reflects the current state of the account.
How often are invoices generated?
Invoices are generated automatically on a scheduled basis. The system runs two core billing operations daily:
Manage Invoices V2 at 4:00 AM UTC calculates and aggregates charges
Issue Invoices at 5:00 AM UTC finalizes and issues invoices
You can configure your billing profile to specify your preferred billing frequency (daily, weekly, monthly, etc.).
What activities can I bill for?
ShipSidekick allows you to configure rates for all standard 3PL services:
Receiving inventory
Storage (by cubic footage and location type)
Picking items
Packing orders
Shipping and carrier services
You can set different rates for each activity and create tiered pricing structures based on volume or other metrics.
How does the system ensure accurate billing?
The system captures billable data as work happens in your warehouse. Every receiving, storage, picking, packing, and shipping activity is automatically tracked and logged. Charges are calculated based on your configured rates, and all transactions are recorded in an audit trail for complete visibility. This eliminates manual spreadsheet calculations and ensures you're billing for every service provided.
Can I have different rates for different customers?
Yes. You can create multiple billing profiles with different rate structures and assign each profile to specific customer organizations. This allows you to offer customized pricing to different clients based on their needs and volume.
How does payment processing work?
ShipSidekick integrates with Stripe for payment processing. When you configure a billing profile, you specify payment processing parameters that connect to your Stripe account. Invoices are issued automatically, and payments are processed according to your configured rules.
Troubleshooting Guide
Issue: Charges Are Not Appearing on Invoices
Possible Causes:
The billing profile is not active for the organization
The billing profile is not assigned to the customer organization
Warehouse activities have not been recorded in the system
The billing cycle has not completed (invoices are generated daily at 5:00 AM UTC)
Solutions:
Verify that the billing profile is marked as active in your billing dashboard
Confirm that the billing profile is assigned to the correct customer organization
Check that warehouse activities (receiving, picking, packing, etc.) are being recorded in the system
Wait for the next daily billing cycle (5:00 AM UTC) for invoices to be generated
Review the transaction log to confirm activities are being tracked
Issue: Incorrect Charges on Invoices
Possible Causes:
Billing profile rates are misconfigured
Warehouse activities are being double-counted
Location type assignments are incorrect
Tiered pricing thresholds are not set correctly
Solutions:
Review your billing profile rate configuration and verify all rates are correct
Check the transaction log to ensure activities are not being duplicated
Confirm that location types are correctly assigned to storage locations
If using tiered pricing, verify that volume thresholds are set correctly
Compare expected charges against the audit trail to identify discrepancies
Contact support if charges remain incorrect after verification
Issue: Wallet Balance Is Not Updating
Possible Causes:
The nightly billing process has not completed
The wallet is not properly linked to the billing profile
Charges have not been calculated yet
Solutions:
Wait for the nightly billing process to complete (typically after 5:00 AM UTC)
Verify that the wallet is assigned to the correct customer organization
Check the transaction log to confirm that charges have been calculated
Refresh your dashboard to see the updated balance
If the balance still does not update, contact support
Issue: Cannot Switch Billing Profiles
Possible Causes:
The new billing profile is not configured correctly
Permission restrictions prevent profile switching
The profile is already assigned to another organization
Solutions:
Verify that the new billing profile is fully configured with all required rates and rules
Confirm that you have 3PL administrator permissions to modify billing profiles
Check that the new profile is not already assigned to another organization
Deactivate the old profile before activating the new one
If issues persist, contact support
Issue: Billing Profile Assignment Deletion Failed
Possible Causes:
The profile has active invoices or pending charges
Permission restrictions prevent deletion
The profile is still assigned to multiple organizations
Solutions:
The system is designed to handle deletion of profiles with recent shipments, so this should not prevent deletion
Verify that you have 3PL administrator permissions
Confirm that the profile is not assigned to other organizations
Ensure all pending invoices have been issued before attempting deletion
If deletion still fails, contact support with details about the profile and recent activity
Issue: Audit Trail Is Missing Transactions
Possible Causes:
The billing cycle has not completed
Transactions are still being processed
The audit trail is filtered to a specific date range
Solutions:
Wait for the next billing cycle to complete
Check that you are viewing the correct date range in the audit trail
Verify that the billing profile is active and assigned to the organization
Refresh your dashboard to load the latest transaction data
Contact support if transactions are still missing after verification
Issue: Invoice Generation Failed
Possible Causes:
The billing system encountered an error during the scheduled cron job
Stripe payment processing is not configured correctly
The billing profile has incomplete or invalid configuration
Solutions:
Verify that your Stripe integration is properly configured and active
Review your billing profile configuration to ensure all required fields are complete
Check that all rates and rules are valid and correctly formatted
Wait for the next scheduled invoice generation (5:00 AM UTC)
If invoices continue to fail, contact support with details about your billing profile configuration
Issue: Permission Denied When Accessing Billing Profiles
Possible Causes:
Your user account does not have 3PL administrator permissions
Your organization is not set up as a 3PL
Access control restrictions are in place
Solutions:
Verify that your user account has been assigned 3PL administrator permissions
Confirm that your organization is configured as a 3PL in the system
Contact your account administrator to request the necessary permissions
If you believe you should have access, contact support with your user details
Best Practices for 3PL Billing
Plan Your Rate Structure Early: Define your rates for all warehouse activities before activating billing profiles. This ensures consistent, accurate billing from the start.
Use Location Types Strategically: Create location types that reflect your actual warehouse layout and pricing tiers. This allows you to bill accurately based on storage location.
Monitor Your Audit Trail: Regularly review transaction logs and audit trails to ensure charges match your expectations and catch any discrepancies early.
Test Before Going Live: Create a test billing profile and assign it to a test customer organization to verify that rates and calculations are correct before rolling out to production.
Communicate Rates to Customers: Clearly communicate your billing rates and structure to customers so they understand how they will be charged for each service.
Use Tiered Pricing for Volume Incentives: If you want to encourage higher volumes, configure tiered pricing that reduces per-unit costs at higher volumes.
Reconcile Monthly: At the end of each billing cycle, reconcile invoiced charges against your expected charges to ensure accuracy.
Keep Wallet Balances Healthy: If using the digital wallet model, monitor customer wallet balances and send alerts when funds are running low to prevent service interruptions.
Document Your Configuration: Keep detailed notes about your billing profile configuration, including rates, rules, and any special arrangements with customers.
Stay Updated: Check ShipSidekick documentation regularly for updates to billing features and best practices.