When Is the Best Time to Audit Your Freight Bill?

Freight bill auditing is a vital part of managing transportation costs and ensuring your business only pays what is necessary for shipping services. Deciding when to audit your freight bill can be challenging, especially as shipping needs and business operations evolve. The timing of your audits can significantly impact your ability to catch errors, recover costs and maintain efficient logistics processes.

Understanding the various audit models can help you develop a strategy that fits your company’s needs and maximizes the value of your freight spend.

Why Timely Freight Bill Auditing Matters

Freight auditing is the process of verifying invoices against the pricing contract, looking for errors like incorrect rates or duplicate charges. An audit ensures a business pays for rendered services without straining or losing resources.

Timely audits are crucial for preserving your right to recover. You typically have only 180 days to file an overcharge claim from the date of the invoice payment, and missing this window means permanently forfeiting any potential recovery.

Being on top of your spending and completing the auditing process in a timely manner allows businesses to:

• Access unparalleled reporting and analytics: The most significant benefit of timely audits is accessing unparalleled insights. Timely audits increase visibility into freight spending through General Ledger (GL) reporting and advanced analytics, providing better budgeting and planning. These insights enable you to track expenses down to the finest detail, identify cost-saving opportunities, improve forecast planning and support strategic decision-making.
• Save money: Catching billing errors, like overcharging or duplicate charges, ensures you only pay for contracted services at the correct rate. You can also use this information to guide negotiations with your current or prospective partners to secure better rates. Pre-audits also prevent unnecessary funds from being spent, ultimately saving the business money.
• Improve carrier relationships: Timely audits demonstrate professionalism and help you maintain trust with your carriers. Prompt communication about discrepancies allows for faster resolution and reduces the risk of disputes escalating.
• Maintain data accuracy: Accurate freight data is essential for meaningful logistics analysis. Timely audits ensure your records reflect true shipping costs and enable better decision-making and more effective negotiations. Additionally, pre-audit services provide detailed reporting down to the GL level, which helps provide visibility into freight spend and precise financial management.

What Is the Ideal Freight Audit Frequency?

While there is no single “best” time to audit freight bills, an ongoing weekly pre-audit is generally the most effective method. This is because the party with the money has the leverage.

A pre-audit is a transaction-based process, with fees often dependent on the type of invoice. A pre-audit involves auditing bills before you pay them. This process can be beneficial for identifying opportunities for cost savings and ensuring compliance with contractual obligations. Businesses with complex routes can especially benefit from pre-audits, as these teams may experience more discrepancies. During pre-audits, it’s important to look for incorrect product classifications, rating errors, duplicate charges and incorrect weight or accessorial fees.

A post-audit allows teams to determine whether they’ve received overcharges after paying a bill. Post-audits are contingency-based, making them a viable option for businesses that might not be ready for a full pre-audit service, such as smaller, budget-limited companies.

Facilitating a post-audit requires businesses to establish recurring feeds of electronic and paper invoices, contracts, rates and payment information for ongoing review. This can be useful for catching errors that slipped through the initial process and allow for overpayment recovery. However, businesses only have 180 days from the date of the invoice payment to file an overcharge claim.

Continuous Auditing

High-volume shippers and teams seeking maximum accuracy often leverage continuous auditing models.  Continuous auditing complements the weekly pre-audit, providing even deeper insights into freight spend. This process tracks elements in real time to minimize errors and reduce risks.

Integrating real-time error detection and resolution into the payment process ensures the immediate identification of discrepancies, allowing you to prevent overpayments before they occur. Continuous auditing supports data-driven decision-making and can significantly reduce financial risks while optimizing working capital.

By combining the structured review of pre-audits with the proactive vigilance of continuous auditing, businesses achieve a comprehensive approach to freight bill management. This synergy ensures that teams can catch errors early, minimize financial risks and maintain accurate and actionable reporting at all times.

Factors That Influence Freight Auditing Timing

Consider the common factors that impact freight audit timing:

• Billing errors: Errors like bill overcharges or duplicate charges complicate and lengthen the auditing and payment process.
• Complex billing: Custom contracts and multiple carrier agreements introduce additional complexities due to varying terms and conditions or variable costs.
• Visibility issues: Without comprehensive reports, teams often struggle to obtain accurate spending and performance metrics.
• Manual processing: Manual auditing processes can be time-consuming and result in payment delays. Teams may also face challenges with scaling as the business grows.
• Compliance and risk management: Businesses must ensure compliance and meet industry standards throughout the auditing process. Inadequate record-keeping or documentation practices can raise concerns about confidentiality and data security.
• Dispute management: Teams relying on manual processes may struggle to track and manage disputes, which can prolong resolutions and strain resources.

Why You Should Consider Contract Auditing

Freight bill auditing can be complex, tedious and time-consuming. Teams that complete auditing processes in-house must invest in the right technologies, hire and train employees and have the scalability to meet demands as the business grows. For many businesses, outsourcing auditing services is the best way to ensure cost and time savings while strengthening partner relationships and maintaining compliance.

Contract auditing with a reputable service provider offers a powerful combination of advanced technology and expert human oversight. Automated systems quickly scan invoices for discrepancies. Experienced auditors then review flagged items, validating charges against your contracts and negotiated rates. This human element is crucial for catching nuanced errors, ensuring accuracy and maintaining strict adherence to your agreements — something automation alone can’t always guarantee.

Additionally, outsourcing these processes allows you to save time and money associated with managing a dedicated internal audit team. You can free up your staff for core business activities while maintaining an efficient and stress-free audit.

Furthermore, contract auditing ensures you can scale operations as necessary as your business demands change. The right provider leverages advanced technology to scale services to match your needs as shipping volume grows while reducing the delays and resource constraints that in-house auditing can create. These technologies can automate processes, capture data and complete reporting to provide greater visibility and faster processing.

Contract Auditing for LTL Freight and Parcel With Broussard Logistics

With Broussard Logistics, our freight bill auditing can ensure timely and accurate payments. Our team optimizes logistics through all modes and empowers businesses to see significant cost savings while maintaining control. We can conduct pre- and post-audit operations to ensure your staff can focus on core business functions while maintaining compliance and efficiency.

Our pre-audit process goes beyond basic checks — it:

• Confirms the correct application of fuel surcharges.
• Verifies that discounts and minimum charges are accurate.
• Ensures proper Freight All Kinds (FAK) application.
• Checks for correct accessorial fees and concessions.
• Validates the rate base.
• Identifies any extension errors.

This thorough approach allows businesses to recover costs immediately, strengthen carrier relationships, and make informed decisions with confidence.

Our comprehensive less-than-truckload (LTL) auditing services ensure you get the most value possible from each shipment. We deploy automated invoice verification, freight invoice pre-auditing and match-pay solutions to verify that charges meet your contracted rates. Our tools allow businesses to recover costs immediately, strengthen carrier relationships and improve decision-making with peace of mind.

We also offer parcel cost management and auditing so you can maintain low overhead expenses while staying competitive. Our team leverages a Transport Management System to conduct meticulous parcel invoice audits. Our solutions include post-audits to verify invoice accuracy and claims filing on your behalf. We also offer specialized service failure audits for express shipments through our parcel invoice audits. These audits validate shipping data, track exceptions, verify rate accuracy and ensure compliance with service level agreements.

Schedule Your Audit Assessment With Broussard Logistics

Broussard Logistics has been serving shippers since 1978. Our services and technologies help businesses manage, control and lower freight costs. With a personal level of attention, flexibility and cutting-edge technologies, Broussard Logistics is the partner you need for efficient and reliable auditing services. Connect with us online to get a customized solution for your business.