Freight Invoice Audit & Cost Management

Reviewing your receipt is a simple way to safeguard your finances and catch any mistakes.

In the world of logistics, the process is quite similar. An abundance of paperwork, different carriage contracts, delays in transit, and the possibility of duplicate billing can all result in inaccurate freight bills. Mistakes are inevitable. However, unlike at the grocery store, shipping invoice errors could cost your business significant money. To complicate things further, simply staying on top of all the invoices that come with a 24/7 supply chain can be a full-time job that requires the expertise of someone on your staff who knows exactly what to look for.

The good news is, there’s a solution. Freight invoice auditing is your secret weapon for ensuring accuracy and reclaiming overcharges.

What is a freight invoice audit?

Freight invoice auditing involves a detailed review of your shipping invoices. This process ensures that every charge on your freight bills is accurate, compliant with your contracts, and free of errors. The goals are simple: identify discrepancies that could cost your business money, recover overpayments, and prevent future billing mistakes.

Why choose our audit services?

When considering an audit provider, our offering stands out for several reasons. First, we provide enhanced visibility and clear insight into your shipping operations. Our seamless integration means you can benefit from our services without needing to start from scratch, making it ideal for businesses with contracts spanning several years.

One key advantage of our freight audit service is the enhanced visibility it brings. You might not fully understand your shipping expenditure, the specific routes used, and other vital details. With our approach, we can optimize your personal tariff, identify which carriers you’re using, and determine the most efficient routes—all without disrupting your current network.

Furthermore, our solution simplifies cost optimization by using your existing freight bills to unveil crucial insights. You may not even realize where your expenses are coming from, but we can uncover any instances of overcharging and provide a comprehensive overview of shipping options and actual prices.

By partnering with us, you’ll gain clarity on your shipping costs and the most efficient routes and carriers. Additionally, we establish standardized procedures, ensuring a seamless implementation process tailored to your specific needs.

Common freight invoice errors

Even with meticulous logistics workflows, you’d be surprised at how frequently your freight invoices might contain errors. Some of the more common issues include:

• Duplicate billing: You received and paid the same invoice more than once.
• Incorrect rates: The charges didn’t align with your agreed-upon contract rates.
• Fuel surcharge issues: Errors existed in calculated fuel surcharges, which should reflect current fuel prices.
• Accessorial charges: Extra fees were applied for services you didn’t request or use, such as liftgates or residential delivery.
• Misclassified shipments: Shipments were miscategorized, leading to higher costs.

Why freight invoice errors are problematic

Freight invoice errors are more than just a nuisance. They can have severe implications for your business:

• Increased costs: Overcharges add up, leading to significant financial losses over time.
• Cash flow Issues: Unnecessary expenses can strain your cash flow, affecting operational efficiency.
• Budget inaccuracies: Erroneous invoices make forecasting and controlling your shipping budget hard.
• Operational disruptions: Resolving billing disputes takes time and resources, diverting your focus from core business activities.

With our Freight Invoice Audit (FIA) Payment Service, we ensure that you only pay for your commissioned services and get a perfect overview of all your freight costs. This detailed overall view is the perfect basis for continuous visualization and optimization of your supply chain.

• Invoice receipt: We can process invoices in all formats, whether electronic or conventional paper. We transfer all records to the workflow-based processing routine.
• Digitization: We digitize all header, position, and value data using OCR technology or by manually entering the information.
• Freight invoice verification: We check all freight invoices against the digitized freight agreements from our tariff management tool for additional charges and double invoice receipts.
• Differential clarification: We’ll clarify any inquiries about missing information, unauthorized debits, or discrepancies in the invoice amount directly with the service provider, securing credit notes for any overcharged amounts.
• Account assignment: Our FIA service also offers accrual reports and account allocation. Your account specifications are used as a basis for an automated account assignment routine.
• Billing file: At the end of the agreed settlement period, you receive an e-file containing all audited and finalized freight cost transactions, including all account allocations. This file can be imported into your accounting system to initiate the payments of the corresponding invoices.
• Freight dashboard: Our online reporting program gives you permanent access and a complete overview of all freight costs, invoices, and related documents.
• Voucher system: If you plan or carry out processes through the Sirius system, we’ll trigger a fully automated “credit note” process. We’ll transmit the freight amounts to the logistics provider based on the tariff engine. The logistics provider will use this credit note and the audited freight amounts to issue an invoice, eliminating your need for verification.

Benefits of performing a freight invoice audit

Freight invoice auditing offers numerous benefits that can transform your business. A qualified 4PL can leverage advanced technology and industry expertise to find discrepancies an in-house team might have overlooked. This comprehensive analysis can help you recover costs and revolutionize how you manage your freight invoices. Key benefits include:

Cost savings

By identifying and correcting billing errors, a 4PL can help you recover overpayments and avoid future overcharges. Doing so can lead to substantial savings, often far exceeding the cost of the auditing service. For example, if you spend $1 million annually on freight, identifying just 3% to 5% in billing errors could save you $30,000 to $50,000.

Improved accuracy

Regular audits ensure that your invoices are accurate and comply with your contracts. This accuracy builds trust with your carriers and strengthens your financial integrity.

Enhanced negotiating power

Having precise data from your audits empowers you to negotiate better rates with carriers. You can base discussions on actual performance and error trends, leading to better terms and lower shipping costs.

Focus on core business

Outsourcing your freight invoice audit enables your team to focus on what they do best: running your business. You’ll spend less time managing invoices and more time driving growth and innovation.

Case examples: Uncovering hidden savings

Consider the following scenarios:

• Cubic crisis: A retailer engaged a 4PL provider for routine freight invoice auditing. The 4PL discovered that one of the carriers had changed their cube dimensions without notice, resulting in an uncommunicated 28% price increase for all shipments and causing the retailer to incur thousands of additional euros in freight charges. After recovering these funds, the company reinvested the savings into expanding its product line, resulting in a significant boost in revenue.
• Accessorial anomalies: A 4PL provider representing a manufacturing firm identified trends in unauthorized or unexpected accessorial charges. Once discovered, the firm addressed them with their carrier and negotiated a new contract that saved them 10% annually on freight costs.
• International incident: A simultaneous change in a customer’s warehouse location and carrier caused the new logistics operator to use an incorrect postcode. When a 4PL provider audited the customer’s invoices, they discovered nearly €18,000 in erroneous delivery area surcharges. The provider worked on behalf of the customer to secure a credit for the overages.

Why companies are turning to qualified 4PL providers

Handling freight invoice audits in-house can be challenging and time-consuming. That’s why many companies are seeking the expertise of qualified 4PL providers. Here’s why you should consider doing the same:

Specialized expertise

4PL providers have the specialized knowledge and experience needed to conduct thorough audits. They understand the complexities of freight billing and know where to look for discrepancies.

Comprehensive audits

4PLs use sophisticated software and deep industry knowledge to perform detailed audits of your freight invoices, cross-referencing charges with your contracts and shipping records. This meticulous approach uncovers hidden errors that might otherwise be overlooked.

Continuous improvement

4PLs don’t just identify errors; they help you implement changes to prevent future discrepancies. This continuous improvement process ensures long-term cost savings and operational efficiency.

Realize your savings potential

Freight invoice auditing isn’t just about catching errors; it’s about unlocking significant savings and enhancing your business operations. By partnering with a qualified 4PL provider, you can ensure accuracy, recover overpayments, and focus on what you do best: growing your business.

Learn more

View our Services and Solutions portfolio to learn how we can help you uncover hidden savings and streamline your freight operations. If you’re ready to explore a partnership with us, check out our Contact page to learn how to get in touch.