Freight Bill Audit – More Than Just a Good Idea
If you don’t have a plan for doing freight bill auditing, you may be impacting your bottom-line more than you think. It is estimated that within the shipping industry inaccurate freight bills can add from 3% to 8% to a company’s annual freight costs. That means that if you spend $10 million a year on freight, then you could be paying up to $800,000 a year unnecessarily.
A professionally handled freight audit can identify corrections needed going forward and can help recoup revenue. But even more valuable is the data mining that comes from the audit that can help you uncover trends that might be costing you, or better yet, might show ways you can increase revenue.
Why do I need freight bill auditing?
Things can happen, in and out of your control, which can affect your freight costs. With our fluctuating economy, freight prices can change with changing gas prices, weather, road conditions, and other factors that affect your carrier and are then passed on to you. 21 questions game . Freight bill auditing is a way to monitor the results of those impacts and verify whether it’s impacting the charge to you. When you get an invoice where the paperwork doesn’t exactly match the original quote or even the Bill of Lading, an audit will help determine where there may be an overall cost rise.
Does the cost of auditing give a big enough ROI to make it worth it?
All business decisions need to be examined closely to make sure you dedicate time and resources to efforts that yield a fair amount of savings compared to the cost. But in addition to saving on freight costs, the data mining benefits of doing freight bill auditing provide a wealth of information that can help in other ways. Here’s examples of how you can use the data you gather:
- Showing transportation and traffic patterns can help you negotiate better rates with your carriers
- Examining the data overall can uncover opportunities for consolidating processes to improve operations and reduce the amount of freight handling.
- Reviewing simple errors like occasional address corrections may reveal a bad customer zip code that is causing repeated errors resulting in unnecessary fees.
- Shipment analysis can uncover new cost-cutting opportunities and drive future procurement and contracting activities.
The bottom line is that freight bill auditing can help you better understand your shipping and as a result make a positive impact to your bottom line.
What’s the best approach?
As is true in so much of the supply chain industry, it’s best to let people who know what they’re doing to do just that. There are both firms and software products that can help meet your need for freight bill auditing. Also, a freight payment service provider’s value-added perks could include bill and dispute resolution, shipment tracking, pre- and post-freight bill audit, and claims help as well as providing data benchmarking and results dashboards. By using a service provider, you can get these in addition to having someone who knows auditing, and who helps determine how often to audit and how detailed the audits need to be. And in the long run, what you learn can be incorporated into daily operations and reduce your overall freight cost.
More than a good idea, freight bill auditing can be good for business.