The freight bill audit process starts with a deep dive into any invoices, physical or electronic. This data is entered into a ledger, which allows the auditor to check for discrepancies and compare current invoices with past ones.
Common discrepancies found during a freight invoice audit include:
The National Motor and Freight associate’s annual classification guide puts all commodities into a class, ranging from 50-500. These classes all have different freight rates that are created based on a variety of favors such as liability, handling, storability, etc. The wrong classification can result in wrongful upcharges, increasing your organization’s transportation costs.
Duplicate invoices, which can cause a double charge for a shipment, are actually very common in the freight industry. They are usually caused by issues such as the carrier using multiple methods for processing an invoice. These costly errors can easily be found by examining shipping bills and invoices during a freight audit.
Accessorial fees are common, but they can sometimes be avoided and are sometimes wrongly charged. Any assessorial fees will be checked during the audit process.
Missing discounts are another area commonly addressed during the audit process. If your organization made a deal with a carrier for discounts, the auditor will make sure they were applied. A good auditing company can sometimes negotiate additional discounts based on things such as late delivery of a shipment.
Since shipping items for longer distances generally costs more, one of the things a freight audit checks is that the zip code and milage in the invoice are correct.
Lastly, a freight audit makes sure that all the numbers and calculations add up. Mistakes happen, especially in manually created invoices, so checking for calculation errors can lead to lowered costs.