The Importance of End-To-End Freight Auditing, Payment Processing and Discrepancy Resolution Services
An American Shipper study showed that as many as 90% of carrier invoices contain errors. Ensuring you only pay carriers their due is no simple task. And it can make the difference between profit and loss on each shipment.
There are many good reasons why your company shouldn’t try to handle freight auditing, payment processing and discrepancy resolution in house. You would need staff dedicated to:
- Analyzing each invoice line-by-line to confirm accuracy;
- Ensuring that there are no duplicate charges or invoices;
- Staying up-to-date on local and federal tax laws;
- Ensuring compliance with all relevant regulations;
- Verifying that all base charges, taxes and accessorials are correct;
- Confirming that relevant discounts have been applied;
- Keeping meticulous data records;
- Negotiating the best possible rates with carriers;
- Paying invoices on time; and
- Contacting carriers to resolve all discrepancies.
Good freight audit and analytics companies provide end-to-end invoice review, payment processing and discrepancy resolution services to save your company valuable FTE (full-time employee) time and ensure you never overpay.
An economical way to avoid individually processing each freight bill by hand, freight audit companies automate manual freight bill audit and payment (FBAP) processes. These processes include data collection and cleansing, verifying base rates, checking for errors and duplications, and confirming that all charges are correct and in compliance with your contracts and tax laws. To show this work, every invoice should be accompanied by a complete audit trail. Only when an invoice is confirmed 100% accurate should it be advanced through the system for payment.
Freight audit and analytics technology saves your accounting team considerable time by automating the payment process and ensuring your financial reports are accurate through proper coding. Once invoices are audited and confirmed for accuracy, invoice audit software assigns a GL code, or multiple codes as defined by your business, to each line item. A good freight audit and analytics company streamlines the invoice management process and optimizes your cashflow by paying each invoice on time – without batching payments. They also deliver invoice metrics to help you understand your freight spend and implement cost controls.
Even the most meticulous manual freight auditing will never catch the carrier invoicing errors that freight audit software detects and eliminates. A good freight audit company will ensure you only pay what you owe. Their experts should work with your carriers to solve discrepancies and request credits on your behalf. No more lengthy phone calls or long email strings – it’s all managed for you.
Carrier refunds should be applied directly to your accounts. To track these in real time, look for a company that doesn’t make you wait for a weekly report, but that gives you access to dashboards with ongoing real-time updates. The best freight audit companies also maintain strong relationships with multiple carriers so that when it comes to processing freight claims, they are able to expedite dispute resolution for you.
On the analytics side, good freight audit and analytics software includes customizable, interactive dashboards that give you full supply chain visibility. This will help you select the most cost-efficient carrier, discover patterns of incorrect charges, benchmark and optimize processes and visualize how expenses are affecting overall cost of goods sold in real-time – all to maximize profitability.
At Orca, we know how tough it can be to keep your transportation and logistics networks optimized. We’re not just a freight auditor, we deliver end-to-end freight auditing, payment processing, discrepancy resolution and analytics technology that helps you create efficiencies and reduce costs. The Orca system goes above and beyond the typical, with analysis customized to run different scenario models for you. Our system recognizes patterns, compares costs of alternative carriers and sums up total potential savings or optimized costs. It drills right down to the SKU level, exposing the true cost to serve each customer you have, with each product that they order from you.
Want to learn more about what to look for in a freight auditor?
If you want to make more profit on every shipment, we should talk.
1. American Shipper, Transportation Payment Benchmark Study, 2015: The Cost of Ignorance.