Monitor Transportation Expenses with Freight Audit & Payment

Freight audits are used to examine a company’s freight bills, verify them for accuracy and adjust them if needed. There are a few steps to this process, including checking shipper information, mileage, carrier information, shipment weights, tracking numbers, bill of lading, discounts and the price. If any errors are found on the shipper’s invoice, the company performing the audit can contact the carrier to correct the errors and create a new freight invoice. The main job of a freight audit company is to make sure that your freight invoice lines up with the costs you were quoted.

Freight payment amounts to an accounts payable service for your company’s transportation invoices. For example, it could look like your logistics or transport lead collecting your carrier invoices and getting them to your accounting team to process each of the payments.

There are many types of freight audit errors that can cause a company’s freight costs to go up. A few of the most common are incorrect shipping discounts, duplicate invoices, incorrect shipping classification, incorrect freight rates, errors in tax and tariff calculations, incorrect milage and incorrect accessorial fees. A good freight audit software or freight audit and payment company should be able to spot these errors quickly.

The freight audit process can look different depending on the type of process used. A freight audit can be performed with a manual, automated or combination process. Here us a quick overview of each: 

Manual Freight Audits 

Manual audits are performed by staff members by hand. They can sometimes be effective, depending on who is performing the audit. However, this type of freight audit often lacks consistency, which can lead to mistakes and increased company costs. Another thing to consider is that the staff member working on a manual freight audit could be spending those hours on other tasks if the freight audit process was automated. 

 Automated Freight Audits 

Automated audits are performed by specialized software. This could be a company’s in-house software, or the software used by a freight auditing company. Typically, automated freight audits provide more accurate and consistent data if the software is regularly updated and maintained. Additionally, this type of software can be electronically integrated with your freight carrier, streamlining the freight auditing process and saving you time and money. 

 Combination Freight Audits 

A combination freight audit is any process that allows most of the auditing work to be completed by software, but still requires some human work hours. Generally, the software performs the audit, and the human worker reviews it and identifies any errors. 

Freight audits have become more complex over recent years due to many factors. Changing technology, transportation modes and rapidly changing prices for needed resources such as fuel are a few reasons for this. These additional costs add new considerations to logistics. While freight audits may have been more manageable for companies to perform in-house years ago, this is often no longer the case due to the challenges mentioned above.  

Due to the rising complexity of performing an accurate freight audit, human billing errors have become more common. With increased expenses and carrier rates across the freight industry, even a small error can cost a company greatly. The most common solution to the growing complexity of freight audits is to deploy a freight audit software, or to outsource the job to a freight audit company with their its  software. These automated solutions greatly lower the risk of errors, helping companies save money and staff hours. 

Lowering Cost 

The most obvious benefit of a freight audit is that it can reduce costs by catching freight bill errors and preventing overbilling and other issues.  

Inaccurate billing is more common than most people would thing in logistics. This is due to human error, using multiple companies, complicated contracts and many other factors. A thorough freight audit is the only way to make sure that your company is not losing money. 

Clear data insights 

A good freight audit is driven by logistical data and provides a deep analysis and understanding of the costs of an operation. Modern freight audit software can keep track of and process large amounts of data, which can show companies overall patterns, discrepancies, etc. that they were not aware of. Freight audit software also keeps this data organized for the long-term, making it easily assessable, should an issue arise that needs to be investigated with data. 

Clarity across your operations 

A good freight audit will provide an overview of the big picture. This gives your company clarity about how to address issues and decide where to go next. 

Saving time 

A manual freight audit and pay process is time –consuming and prone to human errors. Outsourcing your freight audit or using an in-house software saves time and employee attention spent on manual audits. These hours can be put towards other tasks with greater value for the company.