Freight Audit Software vs. a Managed Audit and Payment Service

The short version

• Freight audit checks each carrier invoice against your rates and the shipment record before it’s paid. Software and a managed service both run that check. The difference is who does the work once a problem turns up.
• Freight audit software matches invoices to shipments, re-rates them and flags the exceptions. Your staff work the exceptions, file the disputes and keep the rates current.
• A managed audit and payment service does the checking and the follow-through. It disputes wrong charges with carriers, pays the approved invoices and codes them to your general ledger.
• Software tends to suit companies with a freight analyst and a short carrier list. A managed service tends to suit companies paying many carriers across several modes with nobody dedicated to freight invoices.
• Either one only gets money back if flagged charges are disputed inside the carrier’s claim window.

What both options do

Freight audit means checking every carrier invoice against three things: the rate you agreed to, the shipment paperwork, and what actually happened at pickup and delivery. Freight payment is what happens to the invoices that pass. They go out in one payment run, coded to the right accounts. We walked through the whole process in How Freight Audit and Payment Works.

Both models check the same things. They split on who owns the work. Software gives your team a better tool for the job. A managed service takes the job off your team’s desk.

How freight audit software works

Freight audit software sits between your carriers’ invoices and your accounts payable system. A typical setup runs like this:

1. Invoices come in. EDI files (electronic invoices sent straight from the carrier’s system) and PDFs load into the software.
2. Each invoice is matched to a shipment, usually by PRO number (the carrier’s tracking number) or bill of lading number.
3. The software re-rates it from the contracts and tariffs loaded into it.
4. Anything that doesn’t match is flagged as an exception.
5. Your team reviews each exception, decides whether the charge is wrong, and disputes it with the carrier if it is.
6. Approved invoices go to accounts payable, or to a payment module if the software includes one.

What it needs from you: someone to load and update rates whenever a contract or tariff changes, shipment data the software can match against, and staff time to work every exception. Software is very good at spotting a mismatch. Deciding whether a liftgate fee was legitimate still takes a person who can pull the signed delivery receipt and call the carrier.

How a managed audit and payment service works

A managed service runs the same checks with its own team and systems.

1. Invoices go to the provider. Your carriers send them directly, or you forward them.
2. The provider checks every charge against your rates and the shipment record.
3. It disputes wrong charges with the carrier, with documentation, and tracks each one until it’s resolved.
4. It pays approved invoices in one run and codes each charge to your general ledger accounts, locations and cost centers.
5. It reports to finance: cost per shipment, accessorial spend by charge code, exceptions by carrier, and a monthly freight accrual (an estimate of freight costs incurred but not yet billed).

What it needs from you: your carrier contracts, access to shipment documents, approval rules (for example, which invoices need a sign-off above a set dollar amount), and one contact who can answer questions.

Side by side

Where each one breaks down

Software breaks down when nobody has time for the exceptions. A flag that sits in a queue becomes a charge that eventually gets paid as billed. Timing matters: under federal law, a shipper generally has 180 days from receiving a motor carrier’s bill to contest it, and some carrier tariffs set shorter claim limits. A three-month backlog can quietly turn into charges nobody can recover.

It also breaks down when the rates go stale. Software can only re-rate against what’s loaded into it. LTL rules tariffs, the documents that set every charge beyond the base rate, now regularly run past 70 pages, and carriers can change them without notice unless your contract says otherwise. If nobody updates the software, it checks this year’s invoices against last year’s rules. Accessorial charges are where that gap shows up most.

A managed service breaks down in a different place. Your team is one step removed from the invoices, so you rely on the provider to show its work: what it checked, what it disputed and how each dispute ended. That reporting should be part of the service from the first month. A managed service also takes more setup at the start. Contracts, carrier billing instructions and approval rules all have to be in place before the first payment run.

Five questions for your own team

1. Who works a flagged freight invoice today, and how many hours a week do they have for it?
2. How many carriers and modes do you pay: LTL, truckload, parcel, ocean, air?
3. When a charge is wrong, does the dispute get filed before the carrier’s deadline?
4. Who updates your rates when a contract or tariff changes?
5. Does finance need invoices coded to the general ledger with a monthly accrual, or just a yes or no on each invoice?

What your answers tell you. If someone on your team has real hours for exceptions, you pay a handful of carriers in one or two modes, and finance only needs a yes or no, software can be a good fit. If the honest answer to the first question is “nobody, really,” or you pay many carriers across several modes, the work software flags will still land on someone’s desk. That’s the situation a managed service is built for.

What it costs

Pricing for both depends on invoice volume, the number of carriers and modes, and what’s included. When you compare, count the staff hours too. A software price covers the tool. The hours your team spends working exceptions, updating rates and paying carriers don’t appear on that quote. A managed service fee covers more of that work, so compare the totals at your own invoice volume.

One more test: be wary of any savings percentage quoted before someone has looked at your invoices. How much an audit finds depends on your carriers, your contracts and how invoices are checked today.

Where Land-Link and FPI fit

Land-Link has managed transportation for shippers since 1978. Our affiliate, Freight Payment Inc. (FPI), runs freight audit and payment as a managed service. FPI audits 100% of freight invoices before payment is released, across LTL, truckload, small parcel, air, ocean and international shipments. It resolves the exceptions with carriers, pays approved invoices on a single platform, and codes them to your general ledger with a monthly freight accrual. FPI works on its own or alongside Land-Link’s managed transportation.

Software is the right call for some companies. If you have a freight analyst with time and a short carrier list, it’s a reasonable place to start.

If you’d like to see where you stand first, the Freight Exposure Check asks eight questions and scores invoice integrity alongside four other areas of freight risk. Your result shows on screen as soon as you finish. To see how FPI works, start with freight audit and payment services.

Frequently asked questions

What is freight audit software?

Freight audit software checks carrier invoices automatically. It matches each invoice to a shipment, re-rates it against the contracts and tariffs loaded into it, and flags anything that doesn’t match. Your staff then review the flags, dispute wrong charges with carriers and approve the rest for payment.

What is a managed freight audit and payment service?

A managed freight audit and payment service is an outside team that checks every carrier invoice, disputes wrong charges with the carrier, pays the approved invoices and codes them to your general ledger. Your team approves payments and answers questions, and the provider handles the rest.

Is freight audit software cheaper than a managed service?

It depends on what you count. A software price covers the tool, and your staff still spend time working exceptions, updating rates and paying carriers. A managed service fee covers that work. Compare the totals, including staff hours, at your own invoice volume.

When does freight audit software make sense?

Software tends to fit companies with a dedicated freight analyst, a short list of carriers in one or two modes, and enough time to work every exception before the carrier’s claim deadline.

Who handles carrier disputes when you use freight audit software?

Usually your own team. The software flags the charge, and someone still has to pull the paperwork, contact the carrier and file the dispute inside the carrier’s time limit, unless the software vendor offers dispute handling as an added service.

Can I use FPI without using Land-Link for transportation?

Yes. FPI is an affiliate of Land-Link Traffic Systems, and its freight audit and payment service is available on its own. Companies that manage freight in-house or use another logistics provider can still work with FPI.

How long do I have to dispute a freight overcharge?

Under federal law, a shipper generally has 180 days from receiving a motor carrier’s bill to contest it (49 U.S.C. § 13710) and 18 months from delivery to sue to recover an overcharge (49 U.S.C. § 14705). Carrier rules tariffs can set shorter claim windows of their own, so check each carrier’s tariff and ask your counsel about your specific situation.