The Distinct Freight Audit Savings Components

It’s easy to think of freight audit savings as a specific event with a singular purpose. Shippers must reconcile their books and make sure everything balances out, with the benefit of arbitrating expenses along the way. But what many don’t realize is that this often-tedious task offers far-ranging benefits that go beyond just being able to close the books or recoup costs.

When applied correctly across the scope of business operations, there’s a world of potential savings that exists from freight bill audit data.

The Role of Freight Audit Services for Freight Audit Savings

Freight audit services scrutinize every freight bill to ensure accuracy and compliance with agreed-upon carrier contracts. By identifying billing errors and overcharges, these services directly reduce unnecessary expenditures. The freight audit service provides greater financial transparency and much more.

Identifying Overcharges and Billing Errors

Billing inaccuracies can be a common occurrence due to the complex nature of freight charges. Freight audit services meticulously review each invoice for:

• Incorrect Rates: Ensuring the billed amount matches the negotiated rates.
• Duplicate Billing: Catching and disputing any charges billed more than once.
• Inaccurate Classification: Verifying freight classifications to prevent higher charges.
• Accessorial Charges: Review additional service fees for their validity.

Taking Freight Bill Audit Data Out of the Silo

Shippers tend to think about freight bill audit as simply a way of recouping money or balancing their books — it is, after all, a bookkeeping and accounting function. Yet, it’s important to realize that as a financial practice, audits can actually create savings that ripple across the broader scope of operations. Freight bill audit savings aren’t just dollars and cents on the invoice — they extend to much larger costs and concepts that improve long-term business outlooks.

As shippers probe their freight bills and reconcile discrepancies, they learn more about the nuances of freight operations. In turn, they become better informed about decision-making, logistical approaches, vendor selection, and more.

Enforcing Carrier Contract Compliance

Each freight shipment comes with a carrier contract that outlines specific service expectations and pricing agreements. Freight audit services ensure that:

• Discounts are Applied: Verifying that all eligible discounts are reflected in the billing.
• Tariff and Service Agreements are Honored: Checking that carriers comply with the terms, including tariffs, service levels, and transit times.
• Contractual Obligations are Met: Ensuring carriers fulfill all contractual obligations, avoiding charges for services not rendered.

Streamlining Payment Processes

Freight audit services streamline the payment process, which can lead to:

• Improved Cash Flow: By catching errors early, businesses can avoid overpaying or resolve disputes quickly, improving cash flow.
• Strategic Payment Timing: Aligning payment schedules to match cash flow and business cycles.
• Accurate Financial Reporting: Providing accurate data for financial planning and reporting.

Gleaning Insights from Data

Freight audit services collect and analyze data that can be used to:

• Negotiate Better Rates: Leveraging data from freight audits can strengthen negotiation positions with carriers.
• Optimize Logistics Strategies: Identifying trends in overcharges or frequently occurring issues can inform better logistics strategies.

Reducing Administrative Burden

The process of auditing freight invoices is time-consuming and requires a specialized skill set. By outsourcing this function, companies can:

• Save on Labor Costs: Reducing the need for in-house staff dedicated to this task.
• Redirect Focus: Allowing internal resources to concentrate on core business activities.

Depth of Freight Bill Audit Savings

Reconciled appropriately, freight bill audits put money back into the accounts of shippers who avoid paying undue or incorrect charges — as much as 8% of their total freight spend. These surface-level savings are just the beginning of opportunities to explore on the many “faces” of freight bill audit savings. The key is to reframe your concept of savings beyond dollars and cents. It should also include saved time, frustration, and waste.

Shippers use freight bill audit data to create savings in a variety of ways, including to:

• Better understand which transportation providers are being used for certain products/lanes, and then use that information to make decisions to maximize savings through vendor selection.
• Identify the highest-volume lanes and who is being used for those lanes, and then deploy that data in future rate negotiations to keep costs low.
• Highlight the service levels used in different operational locations around the world, and then adjust logistical processes and approaches to increase savings.
• Reduce the time spent working with providers to identify billing discrepancies, to not only save money and time, but to reduce frustration with staff and providers.

You Get Out What You Put In

There’s tremendous potential to tap in to freight invoice audit data to generate savings across the business. However, the caliber of those savings is directly proportionate to the efficacy of the bill audit process. Savings hinge on the ability to execute a precise freight bill audit efficiently and effectively. Moreover, shippers must examine and understand the data that comes out of their auditing beyond the dollar figure attached to the reconciled amount.

Often, the best way to recognize the broad potential for freight bill audit savings is to partner with nVision Global. Not only do shippers get the peace of mind that comes with reconciliation accuracy, they also get actionable data insights they can apply across the scope of operations to generate even more savings.