Calculating the Benefits of Freight Bill Auditing
In the world of big data, a decimal point can make all the difference. Because freight charges represent up to 10 percent of a company's total expenses, identifying and correcting freight bill errors through auditing is crucial, and shippers want to glean the same insights for their global transportation moves as they capture from domestic carrier data.
Up to 30 percent of all freight invoices are incorrect, according to market research. But performing freight audit and payment internally is challenging, requiring specialized expertise, and extensive time and effort—resources many companies lack. Freight bill payment and auditing services can help companies more easily track where their dollars are going, and ensure they are paying the correct carrier fees.
Before outsourcing freight payment and auditing, vet potential providers based on the following criteria:
- Financial security. Does the provider have audited financial statements, an annual SSAE 16 Type 2 review, and an adequate Employee Dishonesty Bond?
- Customer service. Does the provider track customer service issues? Does it use a customer relationship management tool? What key performance indicators does it maintain?
- Carrier relations management. Is provider staff committed to maintaining outstanding carrier relations? Do they visit with carriers to communicate, resolve issues, and create efficiencies that benefit all parties?
- Coding, editing, and validation. How comprehensive is the provider's ability in this area? Can it derive cost centers from other data elements? Rules should be table-based and event-driven to ensure quick and easy updates.
- Freight liability. How does the provider determine whether the bill should be paid? Is supporting documentation attached? Can it perform electronic validations?
- Parcel shipment capabilities. Can the provider meet the integrated carrier's requirements to obtain refunds for late-delivery shipments that are manifested but not moved on time?
- Visibility. Can you view images of freight bills and supporting documentation to resolve issues? Does the provider's website include standard and ad-hoc reports, client-driven report scheduling, and on-screen and email report delivery?
Savings Beyond the Audits
Using the intelligence freight audit and payment services provide, shippers can optimize their supply chains and garner up to 15 percent additional savings. In addition, engineering can benefit from this data. From analyzing your network to identify the optimal location for your warehouses, to switching modes and consolidating multi-stop truckload shipments, freight audit and payment services offer multiple savings opportunities.
Profit margins are under the gun for manufacturers, retailers, and distributors. Although selling product is integral to their survival, market share and profits rely on getting that product to the customer cheaper and faster than competitors. Freight audit and payment has evolved to become a key part of many shippers' accounting, logistics, and IT operations. It is critical for shippers to choose partners carefully, and take advantage of their capabilities.
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