Outside the world of shipping, few people remember the unfortunate case of Trendset, a South Carolina freight payment company that was sunk by an embezzlement scam. Even though the company promptly alerted both its clients and the authorities, it was too late.
Unfortunately, it’s incidents like that that convince some C-Level executives to handle the time-consuming freight audit and bill payment process in house. Previously, we’ve covered some of the ways third party logistics companies like ours can help you cut costs by outsourcing services. According to the 2014 18th Annual Third Party Logistics Study, the average shipper-3PL relationship resulted in average logistics cost reductions of 11%.
When you hire the right freight auditing company, you can save time and cut costs. But those aren’t the real benefits of a freight auditing company. Whether you ultimately decide to outsource the freight audit and payment process or not, we’re going to provide a peek behind the curtain. That way, you can see how mastering this process will benefit your company on three fronts.
The 3 Steps To Mastering Freight Bill Audit and Payment: Pre-Payment, Post-Payment, and Reporting
So why is it so important to make sure you have seasoned experts to audit your freight bills right? This won’t come as a shock to anyone who’s ever worked with a carrier for more than a day — mistakes happen. It’s just the nature of the industry. But unless you can quickly identify over payments, errors, and redundant costs, those mistakes could hurt your bottom line in a big way.
Part One: Freight Payables Pre-Audit
Although a lot of focus gets put on step two, it’s essential to start at the beginning with a thorough and rigorous pre-audit of your freight bills. In fact, it’s essential to controlling transportation costs and making sure you’re getting the rates you were promised. No matter what mode of transportation you rely on, the best freight auditing company can ensure that your payments go out on time, every time.
Part Two: the Post-Payment Audit
First, we examine all freight invoices billed in the past 180 days (including pricing agreements). Then we audit your paid bills and search for any errors. When we find an error, we file a claim to get the money back you deserve, then send a check to you once the money has been recovered.
Remember: there’s a ticking clock. You have just 180 days to claim overcharges!
Part Three: Payments Reporting
Finally, all the data and invoices gathered in the previous steps can be compiled to provide actionable data. This customized reporting ensures that the freight auditing process pays off on multiple levels, providing companies with real-time data and reporting that helps you control future expenses. For instance, you can identify which carriers consistently overcharged, then use that data to secure better rates.
Conclusion: Freight Auditing Requires Experience
There are enough challenges facing the transportation industry today. Traffic and gridlock can cause up to $121 billion in delays each year, which often can’t be helped, but there are extra costs you can control. Whether you outsource or manage freight auditing in house, you need experts watching your bills, payments, and invoices like a hawk.