Choosing a Freight Auditing and Payment Vendor
If you’re a freight shipper who is thinking about using a freight auditing and payment service, what should you look for in choosing the best vendor for your organization? These seven selection criteria present a straightforward process to penetrate beyond a company’s sales brochure and determine how well a service company can actually do the best job for your company.
SAS 70 or SSAE 16 Compliant. These are audits and certifications that verify a company’s internal system and controls. SSAE 16 is a later and more comprehensive standard. You trust a freight auditing vendor with your money to make payments to carriers on audited bills. Before you even begin, you want to make sure the company has a financial system in place to honor that trust.
Easy Data Access. This one’s important, because the data generated from pre-payment bill auditing quickly becomes a crucial part of how you plan your supply chain moving forward. Drill deep into a prospective vendor’s capabilities. You want user-friendly interfaces and the ability to query any line item or important data element. How easily can you generate specific charts, overviews and trend analyses of transportation costs, accessorial and fuel charges, carrier performance, consolidation opportunities, and whatever else matters most to you?
Your vendor must be able to apply your GL or accounting codes to allocate costs appropriately to categories, departments, customers and vendors. This one area will tell you how well the company understands your way of doing business, rather than simply its own way of organizing data.
Time in Business. One of the best indicators of value in any field is how long a service provider has been successfully conducting business. A long and consistent track record is a good indicator of stability. You need a company that’s going to be there for the long term.
Satisfied Customers. Even with a good track record, is the company resting on its laurels or actively keeping its customers pleased? Your vendor evaluation now branches out to its customers. Who are they, and do you know any of them? Do they have clients within your industry? How long have they been using this freight auditing and payment company? What testimonials can the vendor produce to indicate unbroken customer service over a long and stable period?
Customer Service. By now you should have one or more companies short-listed for a future business relationship. Check references and contact some of the vendor’s clients. How well does this company respond to current concerns and issues? Are problems being heard and solved in a timely and professional manner? Look for an ongoing conversation between clients and the company.
Reputation with Carriers. Turn to the carriers for the final stage of your evaluation. Freight auditing companies add value for carriers by establishing EDI invoicing, providing audited freight bills that get paid faster and making payment information available online. Mutual satisfaction cements carrier relationships with shippers. How well do your carriers enjoy working with the audit company you’re considering? Is the company efficient, and is payment status easy to access? Are payments made in a timely manner?
Funds Transfers. Finally, what’s the gap between the transfer of funds from you and receipt of payment by the carrier? Delay in payment is a bad sign. There were some bankruptcies in the recent recession among audit companies – one additional reason that longevity is a sign of success. You want to see expeditious transfers, and you want to understand the vendor’s internal system for handling your money.
These seven criteria in evaluating a freight auditing and payment vendor give you a selection process that tests a company’s claims in the areas crucial to freight and parcel shippers, and gathers feedback from its clients and the carriers it deals with.