Is Your Freight Payment Company Equipped to Audit Your Invoices?
Businesses use freight payment companies (FPCs) to decrease internal administration costs and maintain detailed back-up information for their finance departments. They rely on FPCs to review weekly transportation invoices for accuracy and make payments on their behalf. Some companies also count on FPCs to audit their invoices.
Companies can gain several benefits by partnering with the right FPC. Large businesses with decentralized logistics networks can benefit greatly from qualified FPCs’ ability to collect and manage all shipping invoice data, pay invoices, track past due amounts, and perform payment tracing tasks. Corporate management can oversee spend and budgets for the decentralized divisions.
For small to mid-sized companies, working with an FPC can deliver savings by cutting administrative costs, and decreasing or eliminating internal training, software, and hardware expenses.
While many FPCs save shippers money through high-value freight payment services, they may not be delivering the same benefit when it comes to auditing invoices.
Relying on an FPC to audit invoices can be costly. For an FPC to effectively audit invoices for all modes of transportation and break down every single charge, it must be equipped with state-of-the-art technology and significant in-house auditing expertise to properly identify overcharges and work with carriers to refund them. If the FPC does not have these resources, the result can be lackluster audited savings numbers.
Parcel carriers maintain growing lists of the various accessorial charges they apply to shippers. Non-parcel carriers keep even longer lists of charges that usually aren’t reviewed and go untouched by FPCs. If you are relying on your FPC to do all of your auditing, you could potentially be paying thousands of unwarranted dollars to carriers each week.
An FPC will usually only audit your transportation charges against your carrier contract, or apply for any late shipments that failed to meet a guaranteed delivery time. A true auditing company will additionally investigate every charge on your invoice for inaccuracies, and provide reporting on additional areas where your costs can be reduced. Auditing firms will even provide analytics and trending services.
The key to success is to rely on a credible carrier auditing firm rather than an FPC to audit your invoices. Most auditing firms should have the ability to work directly with your FPC to tend to your core needs by providing them with the full documentation needed to pay the Carrier invoices, including any General Ledger or Cost Center coding that your finance department utilizes. By analyzing every shipment in your shipping data for accuracy and discrepancies, your auditing firm becomes the true auditing partner you need. While partnering with an auditing firm in addition to an FPC may result in added costs, typically, the costs associated with working with a professional auditing firm are well covered by the savings it achieves.