Freight Audit Services


Usually, shippers negotiate contracts with one or more carriers to ship products around the globe or around the country then hire freight bill auditing and payment companies to review contracts, tariffs, and rates, to audit incoming invoices. The audit ensures the bills’ validity; checks rates, accessorial charges, as well tariff usage; they verifies it is the correct and accurate customer’s invoice to pay; and confirms the bill is not a duplicate.

As soon as the audit function is complete, the invoices are then aged to their negotiated payment terms and funds are requested from the shipper. Upon receipt of funds from the shipper, the freight bill auditing and payment company then submits payment on behalf of the shipper, and then provides reports that help complete their general ledger account coding as well.

Freight Auditing

According to research, Freight auditing gives companies an instant return on investment, (ROI).  They instantly know that they are paying out the correct amount and don’t have to search for mistakes or overbilling on their own.

Checking these facts can have a significant financial impact. Historically, the most vital aspect of freight auditing services has been proven to be cost savings, stated by Brian Scott, (vice president of global sales for CTSI-Global, a Memphis-based company that has been providing logistics services since 1955).  He stated further that some carriers overbill, they are usually and mostly honest mistakes, but they do happen. The function of the service is to find those mistakes so shippers don’t overpay, he added.

A Money-saving Function

In addition to correcting rate errors, freight bill auditing and payment services can save shippers significant labor as well as other internal costs. The freight auditing service provider can manage and process invoices much less expensively due to automation and simple economies of scale. Considering today’s demanding and challenging business environment, these types of savings can go a long way.

According to Harold Friedman, (Senior Vice President of Global Corporate Development at Fort Myers, Fla. based Data2Logistics, LLC), most companies today face greater challenges than ever before, the economy is sputtering along, and also carrier prices are rising as a lot of carriers are leaving the market without being replaced.

Freight charges most times represent up to 10 percent of a company’s total expenditure. Freight auditing services can help companies more easily to track and examine where they are spending their dollars and also ensure that they are paying the correct fees for the services they need.

In Expert Hands

According to The State of Logistics Outsourcing, in 2010, roughly 40 percent of North American firms outsourced some part of their freight bill payment activity. Maintaining control and also performing freight audit services internally can be very challenging, because most shippers don’t have sufficient technology or adequate resources to do it properly.

The expertise needed to catch mistakes easily and quickly does not just come overnight. Over time, freight auditing companies have come up with advanced methods as well as specific knowledge that allow them to find errors that might otherwise slip by. While cost savings depend on the nature of the industry, typical savings on rate overcharges and duplicate payments alone can range from 1.5 to 5 percent.

Research says that; it costs shippers between $3 and $11 to process a freight audit internally. No matter which vendor they choose to handle freight auditing services, shippers will pay a fraction of that cost.

Additionally, many shippers use dated technology systems that are not in-capable of performing an effective and efficient bill audit. Newer enterprise resource planning systems are also mainly designed to capture payment data, and are not robust enough to allow shippers to manage the whole process.

Adding to this, while freight auditing companies focus exclusively on that function, shippers have several other aspects of their businesses to handle as well, which can mean freight bills are checked only at irregular intervals, or not at all.

Leaving freight auditing to the professionals also ensures faster and more accurate and perfect results. Automated audit process can detect or catch more mistakes than an average shipper can in-house. Invoices are analyzed more quickly, efficiently, and less expensively.

Examining the Details

In addition to the basic benefits of freight auditing services, the data that a company can obtain from using such services can be even more precious and valuable. This is where the true bang for the money surfaces.

The automation and reporting tools which freight auditing suppliers often employ can allow a company to closely analyze where it is spending its money.

Using the data that is collected can allow a company to better manage its entire transportation process efficiently. When they see the whole picture, they can identify consolidation opportunities, and also cut unnecessary premium freight as well as next-day delivery spending, and trim or reduce costs by making smarter transportation decisions.

Mange your Freight and Shipping expenses

Your freight expense should not be treated just like other expense accounts when using accounting equation. Freight expenses are considered and known to have abnormal balance, with decreases being known and noted as credits.

So contact DTA for a free consultation session and we will show you how we can save your funds by providing an efficient freight auditing process

Transportation and Logistics

The Freight Audit Process: We provide your logistics team with data and reports on shipping patterns and associated costs, including: origin and destination; drop ship locations; actual weight; cube weight; customer or supplier name; transfer between locations and/or warehouses; and any other industry specific fields clients require.

Please call or email us with any Logistics Management questions.