What is a Freight Audit?
Freight auditing is typically provided by an external audit company. They carefully inspect the carrier invoices and look out for all the inaccuracies in the carrier invoices. Inaccuracies can include billing errors, incorrectly classified shipments, unapplied tariff weight breaks.
This audit will help a company to prevent over-billing, negotiate future shipping rates and choose better transportation strategies along with the most efficient carriers.
Nowadays freight rates and freight pricing in the logistics industry are becoming increasingly complex, and carriers make innumerable mistakes and also fail to meet service level agreements. And thus shippers use freight auditing as a tool. This tool ensures that the shippers pay carriers only after determining that the freight invoices are 100 % accurate and precise.
Rates in the LTL industry are very complex. They are calculated by a range of factors which include mileage, cost of diesel, product type, pickup, and delivery fees. Some of these fees and charges are negotiated with the shipper. Carriers can always add new charges or sometimes they increase existing charges also. For this reason, it is very difficult to track a company’s freight bills to ensure that they are accurate.
Carrier Formats and Error Frequency
Making matters more difficult is the fact that a company almost certainly uses more than one carrier, and each carrier’s invoices are different from one another and they all use different formats. This task becomes challenging when there are potentially hundreds and thousands of items to ship every month. And due to the large volumes of shipments, many errors go unnoticed and undetected.
One out of every four freight bills contains an error that could affect the company’s finances. Manual auditing and freight payment are time-consuming and often require additional administrative staff and time. For companies who lack these resources, they can save time and money by outsourcing freight Audit to an external audit company who has expertise in capturing all the errors and also using the auditing software.
Freight Audit Software
Examination of freight bills is a business process. Freight bill’s duplicates and accuracy are adjusted and verified. Now the shipper can stop wasting the time of their Accounts Payable department on the grueling, time-sensitive process of auditing, while also bringing in extra money at the same time. The shipping company has to pay the cost when there are overpayments. There are also other benefits like actionable data that can be used to negotiate better rates with the carriers.
Freight Invoice
Carriers submit an invoice to the customer or an external audit company, this invoice is the freight bill. Audit companies approach the respective carrier when there are errors in the shipper’s invoice. They suggest the carriers to correct and generate a new invoice. Here at AudIntel, as a leading freight audit provider, we ensure that shippers are not overcharging for their freight services. For example, in the shipping world, overpayments occur far too often. Carriers like FedEx freight/UPS freight delivers an average of 9 million packages in 220 countries every day. Hence the mistakes are inevitable. As a result, the freight audit service ensures that your actual freight invoice matches the quote.
AudIntel’s role in freight audit
We at AudIntel, do many explicit audit checks on various types of freight invoices. This makes sure that even the smallest of discrepancies are captured. This in turn saves a good share of money for the shippers. And also provide data insights showcasing trends for revenue, shipments, accessorials, carriers, etc. For further queries, please visit Audintel or contact at +1 (619) 354 8539 or mail to [email protected].