Software for a Transportation Spend Management System

Transportation spend management (TSM) encompasses numerous mission-critical tasks for any company in the transportation or logistics sectors. Most businesses acknowledge the importance of tech-forward operations. The widespread adoption of transportation spend management tools is illustrative of that.

It is essential for anyone in leadership to understand the importance of software for managing transportation spend, and the key role it plays in enhancing visibility and streamlining operations. Transportation spend management in 2022 looks different than it did in 2021, or 2020, and leaders in this space must work to maximize the value of this technology.

Read on to learn more about what TSM software is, including its core functions and features, and details on the best TSM software available today.

The team at Trax Tech has assembled this handy overview just for you. If you already know you need an expert eye on your transportation spend management systems, you can reach out to us today.

What is Transportation Spend Management Software?

Transportation spend management is a data-driven approach to optimizing the total cost to serve with a company's supply chain by creating end-to-end visibility of both performance and cost. There are various tasks of data analysis and interpretation — including invoice auditing and data collection — many of which are made possible by effective transportation spend management software.

We are referring to this as “TSM software,” but you may also hear similar phrasing that includes transportation spend management systems and transportation spend management programs. 

Typically, these terms all refer to a similar process for performing the following functions:

  • Data collection
  • Data analysis, organization, and standardization
  • Data visualization
  • Invoice auditing
  • Additional tracking and reporting

Want to rewind even further to revisit the basics? Read this next: What is Transportation Spend Management?

TSM Software Fundamentals

There are a few fundamental ways TSM software simplifies business operations:

Finance/accounting — The finance function relies heavily on data to ensure everything from cost allocation of transportation activities all the way down to the SKU level, defensible accruals for shipped but not yet invoiced shipments, budget variance and projections, and days payable outstanding optimization. Transportation spend management software can cover far more ground, data-wise, than any manual process. This increases the value of the data, making it representative of both broader and more granular dynamics, and ensuring that it is as relevant and real time as possible for strategic decision-making by finance and accounting.

Logistics and operations — By nature, logistics and transportation operations are vastly complex, and carry with them many components that are related to spend. Synthesizing all of that data is a task best handled by TSM software. The right tool is capable of doing it all: tracking goods; tracking vendors; tracking transport quality, quantity, timing; and more.

Compliance and documentation — Part of the complexity of operations is in the array of compliance measures that must be taken and documentation that must be tracked. Any time specific, detailed records are needed, technology can mitigate the risk of human error and deliver accurate results at a far greater speed than human-driven processes. Often, spend, data and decision compliance are concerns for upper management but only afterthoughts for their direct reports. This is another benefit of TSM software: It ensures compliance throughout the system because it includes robust business rule configurations.

Reporting — The right reporting isn’t just reflective, it can be interpreted to create the possibility of proactive, even predictive, decision making. Comprehensive, robust reporting is built into any sophisticated transportation spend management software.

These are the fundamentals of how TSM software works, and these tasks are carried out through a variety of TSM software features.

TSM Software Features

Transportation spend management software has features that support the various stages of a company’s journey to transportation spend management maturity.

Freight Audit and Payment

Freight audit and payment (FAP) is a cornerstone of TSM software. FAP makes it possible to measure and analyze data down to the very basics of processing and paying freight invoices. Freight data — rates, volumes, carrier contracts, etc. — are the foundation to growing more efficiently. TSM software should offer automated invoicing processing and payments, accurate auditing of things like contract rates, and equip your team with a transportation freight data and rate management strategy.

Freight Data Management

All of the raw data in the world is fairly useless. This is where TSM software addresses the gap between good data and bad data. Most companies lose a significant amount of money, and make even serious mistakes, because of bad data. The right TSM software will course-correct that, collecting as much data as possible but also standardizing/normalizing it. The best TSM software will create a centralized location for diverse data sets from across global transportation networks, joining data from disparate systems, such as TSM systems and Enterprise Resource Planning (ERP) systems. Additionally, software allows for data compliance by rejecting data to the source if it is out of compliance or flagging it for non-compliance and manual review. Working with clean, high-quality data is a second foundational component of transportation spend management systems that actually work.

Measuring Progress

Without the right data (gleaned from accurate, timely freight audits) and reliable data (gained from standardization/normalization), it’s virtually impossible to accurately assess your business. This also means it’s impossible to set the right key performance indicators (KPIs) and make efforts for continuous improvement. TSM software delivers the right data, and reliable data, to enable goal-setting that makes sense and is measurable.


On that journey toward continuous improvement, supported by the right system, you can achieve optimal performance in numerous, important areas:

  • Finance management optimization, including budgeting, accruals, cash flows, forecasting, electronic billing, automations, and more.
  • Carrier management optimization, which increases visibility and grades carrier performances. This gives you an ROI on quality, and further supports KPIs for growth.
  • Carrier RFP optimization, which can increase your potential to save on the RFP and negotiation process. 
  • Routing guide optimization to reduce fuel and general operational costs.
  • Network optimization, which gives you a complete, holistic view of the organizational supply chain.
  • Zone skipping analysis, which can lower the shipping per package price through consolidation.

Industry Leadership

An ideal outcome of becoming a company with perfectly deployed transportation spend management software is industry leadership. You will always have the right information to make the right decisions. All of the information and data you now have can be re-invested to enhance operations, giving you an unrivaled strategic advantage in any market.

Trax: a TSM Software Company in Your Corner

The goal of transportation spend management software is to accelerate progress toward transportation spend management maturity. When your organization has reached maturity in this area, you will have maximum visibility into spend, understanding every contributing dynamic to your current state, and gaining the ability to make informed, strategic decisions that help you achieve your goals. This is an elite ambition, and one that very few companies can maintain or sustain; that is, without help. 

At Trax Technologies, we are fully dedicated to supporting your company’s growth in this way. We work with global businesses to implement cutting-edge practices and the highest performing TSM software in the world. This ensures you aren’t just prepared to tackle the challenges of the day, but to conquer anything that comes your way tomorrow. The time is now. Connect with us today.

Trax Technologies

Trax Technologies

Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.