Freight Audit Services help in auditing the process which is essential for shipping companies. Shipping large volumes of goods at a fast pace and at less cost is vital for shipping businesses. Freight are shipments that weigh more than 150 lbs. Transportation of freight is a complex logistic process. Shippers have to pay freight bills to shipping carriers for freight transportation.
Factors like modes of freight transportation, distance, type of shipping goods influence the invoice amount. An audit is required to verify the invoices. In this article, we will discuss freight audits, their types, and the benefits of using freight audit services.
Overview of Freight transportation modes
There are different modes of freight transportation: road, air, maritime, rail, intermodal, and multimodal. Transporting goods by these modes have a different impact on businesses.
Road transport is the most popular mode of transportation used by shippers. Businesses that transport thousands of packages use trucks or trailers. There are two types of road transport: Full Truck Load (FTL) and Less-than-Truck Load (LTL). In FTL, shippers can ship a truckload of freight and pay for the full truck. While, in LTL, shippers only pay for the part of the truck that contains their goods but takes a longer shipping time.
Maritime (Ocean) transportation is the slowest mode but transports the highest volume of freight. They are two types: Full Container Load (FCL) and Less-than-Container Load (LCL).
Air cargo transportation is the fastest mode of transportation for shippers. Shipping carriers transport high-value freight and require quick delivery by this mode.
What is Freight Audit?
A business process where a shipper’s freight bills undergo examination, analysis, and verification is a Freight Audit. Freight bills are invoices from a shipping carrier to a shipper. Advanced software is in use to analyze freight bills for accuracy. A freight audit finds billing inaccuracies and saves money for shipping businesses.
Types of Freight Audit
A freight audit process can be manual, automated, or a combination of both. A Manual Freight Audit process is time-consuming and may lead to errors. The Automated Freight Audit process uses sophisticated software to give consistent and quick results. There are different types of audits based on factors affecting the freight invoices.
1. Freight rate audit
Shippers and carriers decide on a tariff for freight transportation. Freight rate auditing checks the freight bill entry process. The audit is on the transportation charges and discounts. The shippers find it hard to calculate tariff rates as it varies based on a variety of parameters like shipper address (city, state, country, zip) to consignee address (city, state, country, zip), the permutations and combinations are generally exponentially high. Automated freight rate audit of Audintel can verify the freight rates charged by shipping carriers. We identify if there is overcharging or tariff rate change by the shipping carriers. We will raise a dispute with the carrier and get the carrier to properly charge the client.
2. Duplicate Invoice audit
An audit helps in identifying shipments that have multiple duplicate invoices. For example, if a single consignment has two closely matching invoice numbers, shippers may end up paying twice. Audintel conducts audits on shipments based on parameters such as invoice date, the weight of the shipment, bill of lading (BOL), invoice amount to prevent duplicate invoicing. Invoices that are duplicates are moved to zeropayclose and not forwarded to the client for payment.
3. Three-way Match audit
A three-way match audit involves three parties, the shipper, shipping carrier, and the auditor. It requires matching the invoice of the shipping carrier with the shipper’s match file. The match file comprises invoice records and estimated shipping price. The auditor compares the files and invoices to check for any errors in the invoice of the carrier.
4. Surcharge Audit
Other than transporting charges, freight carriers offer facilities to shippers. The facilities include lift gate charges, toll fees, additional handling charges, and more. There is an agreement between our client and shipping carriers regarding fees. Audintel audits surcharge levied by the shipping carriers and ensures that there is no overcharging.
5. Fuel Surcharge Audit
Fuel costs vary every day. The U.S. Energy Information Administration (EIA) announces weekly fuel prices on its website. The freight carriers adjust the fuel surcharge amount based on EIA published fuel prices based on the pre-agreed weekly days with the client. Audintel is a freight audit service provider that monitors any additional fuel surcharge applied by the shipping carriers during shipment.
Benefits of Freight Audit Services offered by Audintel
Audintel saves money for its customers with its freight audit services. It is a tall claim. Our customers can see the benefits of partnering with us. Our software helps customers
- Review freight invoices
- Minimize billing errors
- Save time and money
- Optimize supply chain operations
- Calculate fuel surcharge rates
- Make the freight billing process simple
Audintel has the best freight audit software that takes care of shippers’ freight billing.
To summarize
Shippers need to invest time and resources to verify freight bills. Businesses are losing money and time by manually tracking freight bills. Shipping businesses recover 5% to 10% of their freight costs through auditing. By using freight audit software, shippers have better control over their transportation expenses. Freight auditing is a way to control a shipper’s freight spend. Audintel is providing real-time information through its intuitive dashboard. We use state-of-the-art technology to audit freight invoices and save money for our customers. For further details, write to us at [email protected] or please visit our Audintel website or call us at +1 (619) 354 8539.