Freight bill audits are frequently an accounting afterthought. Many companies simply go through the motions to make sure the numbers add up, reconciling where they can and remediating when necessary. But there’s a lot more value to be gained from a freight audit than from identifying clerical errors and capturing money. At its core, the data used in freight bill auditing is a powerful tool for informing broad operational improvements.
Freight bill audit data can tell you a lot about what you’re shipping, how you’re shipping it, and where you can create cost savings. Think of reconciliation and finding money as short-term benefits, while pattern recognition and trend analysis are long-term opportunities. It’s not just about balancing the books. It’s about optimizing operations.
Analyzing Freight Bill Audit Data for Insight
Freight bill audits don’t just show accounting discrepancies they are a peek into spending trends and shipper relationships. All the data captured by a transportation management system (TMS), and leveraged in an audit is critical to understanding supply chains and the methods, modes, and service levels of freight transport. Can you confidently answer the following questions?
- Why are you spending X on final-mile delivery from an independent transportation provider when you could spend Y using an integrated delivery partner?
- Do the audit issues you’re having with an OTR transportation provider outpace the cost savings you gain from choosing them over a slightly more expensive provider?
- Is it possible to consolidate your shipments to X destination on a succinct schedule and avoid multiple, costly LTL shipments?
There’s a tremendous variety of data available from a freight bill audit, and it’s up to shippers to extract the insights that data offers, whether they apply to cost centers or logistical approaches.
Applying Insights for Enhanced Efficiency
Too many shippers view freight bill audits as a singular task with a single object: balancing the books. But by viewing audits through the lens of improving operations, shippers gain tangible value from the data provided. When you attach value to the data, beyond closing accounting gaps, you understand the true cost of shipping practices.
For example, recognizing the value of transportation provider A over provider B might lead to preferred status for provider A. This, in turn, leads to a more expansive exploration of provider A’s abilities, which might then trigger rate negotiations and broader SLA terms. In this scenario, freight bill audit provides insights and creates value in the following ways:
- Transportation provider consolidation with an improved relationship.
- Expanded service agreement for an integrated solution.
- Rate negotiations for lower costs.
- Term negotiations for increased consistency.
In this example, freight bill audit data highlights where the shipper can leverage transportation provider A’s proven capability to create consistency and even reduce costs elsewhere. This is especially critical in light of persistent economic and supply chain issues.
Look Beyond Discrepancies to Pinpoint Opportunities
Optimization driven by freight bill audit data is possible given any relevant variable, whether it’s carrier, channel, load type, distance, or destination. Freight bill auditing brings data together and identifies patterns that directly correlate to operational improvements for shippers. If you’re not auditing for more than money, you’re missing out on cost savings and enhanced efficiency.
What can you learn from freight bill audit data? Opportunities for more operational efficiency are only visible when you look beyond reconciliation. Let nVision Global help. Visit us at nvisionglobal.com
to learn more.