As the challenging year of 2020 draws to a close it may be useful to review some of your freight payment protocols. A good place to start is a year-end freight bill review. Things are a little quieter this time of year and there is plenty of recent data to review. Typically, this is a no cost exercise provided by your 3PL so there is every reason to have the review done. If for no other reason than knowing your fright payment protocols are working.
What is a Freight Invoice Audit?
Rising freight costs is an emerging area of concern as seen in recent years. The cost of freight has been rising due to the increase in oil prices and all freight cost is highly dependent on the cost of transportation which relates directly to fuel prices and market demand. With high fluctuations of fuel costs, low visibility of the future freight costs and high complexity of the freight quotes, freight cost verification are vulnerable to human and process errors and this requires proper auditing to ensure that the organization does not overpay for services it did not incur. As a concept, freight invoice auditing is not overly complicated to understand but is a playground for mistakes and inefficiencies due to the volume of transactions. The potential financial leak is significant. The idea is to make sure you only pay the shipping charges you should, and nothing more. In most cases, software does the hard work. However, in some cases more focused auditing may be necessary to identify overcharges or inefficiencies. An organization is daunted with the task of calculating the freight rates manually and this task can be challenging when the customer has hundreds of shipments shipped each month. Most organizations do not have the manpower to calculate all the freight invoices issued to them and, at best, they perform random sampling to check if the sample invoice is billed correctly. It is simply a sound business practice to do an annual freight bill audit.
Billing Errors Happen More Than You Think
Shipping charges can make up to 10 percent of a company’s total expenses. It’s not unusual for companies to spend millions or tens of millions of dollars annually to ship their products with trucking companies or parcel carriers like UPS and FedEx. But it’s common for major shipping carriers to overcharge by missing discounts or mis-classification of freight. Pricing in the shipping industry is complex, and in many cases, carriers make mistakes or do not meet service requirements. Billing in today’s logistics environment contains a myriad of charges and discounts, base rates, fuel surcharges and hundreds of accessorial charges. There’s a lot of opportunity for mistakes, and you need to protect yourself. That’s where freight invoice auditing comes in.
At Freight Payment, Inc., a subsidiary of Land Link, freight bill auditing is a big part of our business. Most successful companies know the value associated with utilizing the services of a fully integrated freight bill audit and payment service. More than 80% of well managed companies, with operations in the US currently use and leverage the power of audit and pay solutions. Our solution takes the benefits of standard freight bill audit and payment to an entirely different level.
- Avoid carrier over charges and payments
- Avoid chasing over payments and a painstaking post audit process
- Eliminate short payments and hence past dues and balance dues
- Improve credibility and credit ratings with carriers
- Command better rates as a result
- Audit and validate 100% of all freight invoices
- Dramatically reduce the cost associated with the processing of freight bills in house
- Gain access to a meaningful monthly and year end freight accrual
- Leverage the related data through effective database management and the production of meaningful Key Performance Indicators.
Call to Action
If you are a company with higher shipping volumes, or several different pricing tariff agreements and negotiated rates in place, our program is essential for your company. If you believe that your company could benefit from using collected and well managed data to drive performance measurements and hence the making of sound business decisions, then you’ll want to strongly consider our solution.
Contact us today http://www.fpinj.com to setup your complimentary review. We would also like to take this opportunity to wish you and your family a happy holiday season.