The billing party is responsible for paying shipping costs and resolving any issues related to customs duties or delivery. They may not be the sender or recipient of the shipment and may have credit and dispute options. Authorization numbers may be required to limit risk.
A billing party is an entity named on the shipping documents that is responsible for the costs associated with shipping. In the event that the invoice is not paid, the transportation company first approaches the billing company to discuss the situation and attempt to recover payment. This information can be included in packing slips, shipping labels, bills of lading, and other documents associated with a shipment. It is also entered into the shipper’s computer system along with other shipment information for future reference.
This party is not necessarily the sender or recipient of the shipment. For example, if a computer user sends in a laptop for repair under warranty, the party billed on the invoice will typically be the manufacturer’s warranty program, rather than the customer or repair center. There may be various circumstances in which a third party may be liable for the costs of a shipment.
The billing party pays the charges associated with the carriage of the shipment together with any taxes, fees and duties that may be incurred. If there are concerns about matters such as customs duties, this party is responsible for resolving them in advance by filing the correct declarations or by contacting customs officials to find out the details. This party may also be liable for charges associated with re-delivery, returns and other situations which may arise if a package cannot be delivered as stated.
In the event materials are being sent with a payment on request for delivery, the billing party may be responsible for the fee charged by the shipping company to recover and process the payment. The shipping company can present an invoice for all funds owed, with information about the nature and origin of each charge. The billing party may have credit, allowing 30 to 90 days to make payment before the account falls behind, and a dispute may also be filed during this time to correct an error with the billing.
To avoid situations where people list a random person as the billing party, shippers may require the use of an account or authorization number. This limits the risk of the shipper sending an invoice to this party, only to find that the shipment has not been authorized and the invoice will not be paid. Typically the shipper should include an authorization number on the package which can be referenced with the billing party to confirm that they accept responsibility for the shipment.
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