very month, more manufacturers, LTL shippers, and traffic managers will turn to a freight auditing company to help them manage Freight Bill Auditing and Payment services. So why do so many companies outsource this vital task to a third party rather than simply audit a paid freight bill in house?
Time is a major factor, of course, but there are other important incentives as well, like recovering money you didn’t even know you were owed.
How Third Party Freight Auditing Can Start Saving Money Right Away…
First, per the Trucking Industry Regulatory Reform Act of 1994, you only have 180 days to claim overcharges to freight carriers. And by law, that carrier must acknowledge receipt of your claim within 60 days, usually making payment within another 60 days for viable claims.
So how can outsourcing freight auditing save you money in both the short and long term? It’s simple. When you devote your own resources and labor to audit your freight bills, you’re taking away precious resources that could be spent on your core business. And whether you recover overpaid freight charges or not, you still have to pay your employees to audit a paid freight bill one by one by one.
But because the best third party Freight Bill Audit and Payment companies work on a contingency basis, there are no costs unless overpaid charges are found. That means there’s no cost to you whatsoever unless overpayments are identified. Plus, because professional freight auditors have extensive experience identifying errors and dealing with carriers, they can manage this process much more efficiently.
That means you can stop wasting the time of your Accounts Payable department on the grueling, time-sensitive process of freight auditing, while also bringing in extra money at the same time. If no overpayments are found, there’s no cost to you.
Unfortunately, in the shipping world, overpayments occur far too often. A carrier like FedEx delivers an average of 9 million packages in 220 countries every day, and mistakes are inevitable. There are also a host of other benefits as well, like receiving reams of actionable data that can be used as leverage in negotiating better rates in the future.
Audit a Paid Freight Bill With a Third Party: How Does It Work?
The process is straightforward:
- Your company sends freight invoices from the past 180 days in bulk to your freight auditor.
- Invoices and bills are compared with pricing agreements to identify errors.
- A claim is filed on your behalf.
- When payment is made, your company receives a check.
According to the 18th Annual Third Party Logistics Study of 2014, shippers reduced logistics costs by 11%, inventory costs by 6%, and fixed logistics costs by 23% on average.
If you want to start recovering money — money that you’re owed — then it’s time to turn to the freight auditing experts.