Is Your Freight Audit System Equipped for the Supply Chain of the Future?
Globalization and the rise of complex supply chains have brought forth many new variables for shippers to consider. It’s no surprise old freight management systems have become outmoded ― replaced by more robust platforms. So why are many companies still using antiquated freight accounting software? The supply chain of the future requires proactive oversight, not reactive remediation — especially when it comes to auditing and payments.
Audits are a major part of the freight industry
It’s estimated that 20% of freight invoices contain an error affecting pricing. Last year, nVision Global processed over 125 million invoices totaling $6.1 billion in net cost. Back-of-the-napkin math says nearly 25 million of these invoices were incorrect in some capacity, representing untold millions in lost revenue for shippers. Without auditing, those dollars would remain lost.
With this amount of money on the line, the call to action for companies to invest in better auditing software and practices is clear. Yet many still process invoices as gospel, without any real thought to audit. Worse still, they use software that only checks for certain types of errors, lulling themselves into thinking they’re catching problems when they’re only accounting for a small fraction of them.
Take the high-stakes trade climate we’re currently in. Countries exchange tariff volleys every few months, changing the cost of goods and the cost of shipping them. An order shipped before tariff increase, yet arriving stateside after them, may be subject to different costs and fees, affecting invoicing.
Or, consider real-time pricing mechanisms. Freight capacity may be high one day and low another, creating price-per-mile fluctuations. Keeping pace with these changes and affected rates can substantially change invoicing costs.
These examples, in addition to factors like the rise in LTL trucking, California contractor rulings, and bundled intermodal services, set the stage for complex invoicing errors. Real-time, powerful auditing systems are needed to keep pace with them.
Now, shippers are actually saving money
One of the biggest reasons companies haven’t updated their auditing processes is because of cost. Because smart auditing and payment software can keep up with modern supply chains, catching cost discrepancies in real time assures the best possible rates. In the past, auditing didn’t make sense if it meant spending $10 to recoup $1. Now, the formula is reversed. Modern software is so adept at finding discrepancies that a $1 investment may inevitably net a $9 return.
Modern auditing software is two pronged. Not only does it find and remediate costly errors, it prevents them from occurring. The result in both cases is more money back into the pockets of shippers. In a world where the supply chain is becoming more complex and more expensive, every dollar counts. And if each dollar put into a modern auditing solution turns out $9 more, the math more than justifies the investment.
More complex supply chains require smarter auditing software. It’s time for companies to shift from reactive to proactive in their auditing and payment verification processes. nVision Global is ready to help put your company on the cutting edge, tackling accounting errors before they ever become a problem. Visit our website at nvisionglobal.com.