Even though the global supply chain has experienced some recovery in recent years, it still includes a number of challenges that impact shippers. There is a dynamic rate landscape, increasing regulatory pressures, and a complex geopolitical landscape with a significant focus on tensions with Russia and China at the moment.
Up against this dynamic logistics landscape, shippers face an increasingly exception-prone experience. This translates into shippers searching for strategies to improve freight auditing processes.
A freight audit is an accounting process that verifies the accuracy of freight invoices and other shipping documents. Audits are typically done after the shipment is delivered to ensure that the carrier has charged the proper amount, that the shipment was delivered on time, and met the agreed-upon terms and conditions. The freight audit can also help identify any discrepancies or errors that can be disputed and resolved.
Shippers have to deal with common freight audit pain points like:
The following steps help shippers create a more beneficial freight audit and payment process despite the challenges they face.
Freight bill audit software helps shippers move forward from the time-consuming and inefficient methods of the past. They can streamline and automate freight auditing processes to create better strategies and associated benefits. In other words, they remove outdated methods like paper filing and manual data entry, which come with downsides like the propensity for human error and wasted time.
The freight audit and payment process becomes more timely and accurate through advanced software. This leads to benefits like fewer exceptions and catching problems in real time so shippers can address them immediately before they escalate. In addition, the software brings together a significant amount of data that shippers can use to gain insights, analyze, and make informed decisions.
Intelligent Audit offers cloud-based freight auditing systems that allow shippers to automate their audits and monitor data from freight invoices. It can provide alerts in real-time to let shippers know about discrepancies as they happen.
Shippers can improve how they carry out transportation accounting by using cutting-edge technology in logistics finances. They can automatically track invoice data and collect it within freight audit software. This gives shippers a better idea of their cost allocations and the opportunity to catch problems as they arise. They can collect and normalize data from invoices that they can then analyze and use for reports, insights, and decision-making. They can also control quality by checking invoices compared to carrier contracts and shipment files.
Intelligent Audit’s freight audit software improves the entire accounting process for shippers. Among its many logistics accounting tools, it finds invoice discrepancies, helps shippers expand their carrier networks, and provides data, analysis, and forecasting. Its finance and accounting tools provide accurate, organized records and automatically compare budgeted versus landed costs for reporting. It can help shippers optimize their spend and their processes.
Shippers can use the data they collect from freight invoices to create a freight rating system. This ranking of shipment records helps shippers audit invoices and create freight accruals. For ranking processes to work successfully, they need a user-friendly system of pricing agreements that includes clear details and accuracy. Pricing needs to be broken down into line-item pieces of the whole.
Creating an effective ranking process makes it easy to automate freight bill audits. The process should include rating at the time of the shipment and then again after receiving the invoice. The first one provides information for things like accruals and pre-paying, while the second can provide additional information, such as extra fees, and catch discrepancies and exceptions.
Shippers can use analytics to gain an understanding of how logistics partners are helping or hindering their logistics performance. Intelligent Audit’s shipping analytics technology uses artificial intelligence, machine learning, and other tools to make it easy to collect and analyze data and develop a freight rating system.
It’s common for shippers to receive duplicate invoices from freight carriers, which they are then likely to pay due to the sheer number of invoices they receive. This is just one of the many freight auditing missteps that can occur, impacting finances and overall business operations.
The way to manage this problem is to set up controls that quickly and accurately catch the problems so shippers can immediately solve them. Instead of discovering issues far down the road during manual audits (when it may be too late to submit a claim) or missing them altogether, shippers can set up automated systems as a form of control to alert them to these problems.
Shippers can use complete, standardized data fields to avoid duplicates. Other controls might not always work if the duplicate version introduces differences, such as a new pro number. Including numerous data fields makes it much easier for the system to catch the problem.
Shippers can better use freight claims as an advantage rather than a chore by knowing how to take full advantage of invoice terms. When working with numerous carriers and invoices, shippers have a range of due dates to follow. They inevitably end up paying a stack according to an invoice process date, regardless of the due date, which results in funds lost before they need to be paid and some invoices paid late with the resulting repercussions, which likely include late fees. Going around the system to expedite a payment if needed can take considerable time and effort.
Instead, it’s ideal for shippers to follow the individual terms for each carrier and even for specific invoices. They can set up a system to follow set criteria, which may differ from one invoice to the next. For instance, shippers need advanced systems that allow them to set payments 60 days from a receipt date for one invoice and 30 days from an invoice date for another. Sophisticated freight audit and payment process software makes this kind of strategy possible.
Shippers can use data to build resiliency in freight audit and payment best practices. Setting up good freight auditing and accounting practices enables shippers to collect high-quality data and maximize its use through analytics, leading to beneficial business intelligence regarding transportation spend.
Overall, shippers gain increased visibility through the large amounts of data they can use from freight invoices. Shippers can normalize data that may not initially match up and then use the analysis to learn more about ways to manage costs and optimize processes. Shippers gain visibility into specific metrics like spend per lane and accessorial costs that they can use to compare carriers and negotiate.
Intelligent Audit’s freight bill audit software streamlines the process of gaining visibility through data. It normalizes large amounts of data from the various details of invoices from differing carriers, bringing together the data to analyze for improved accounting practices, business insights, and carrier comparisons.
Optimizing accounting processes is helpful for any business, and it’s beneficial for shippers to focus on streamlining their freight audit and payment process in particular. Freight bill audit software makes this optimization effortless, as it can automate processes and monitor data on its own. It replaces inefficient practices with fast and accurate ones.
Intelligent Audit offers a range of solutions to help with freight audit and payment best practices:
Intelligent Audit, a freight audit company, has been the transportation industry’s choice for freight auditing for more than twenty years. Get started with Intelligent Audit today to improve your freight accounting practices and receive the associated benefits of streamlining.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
Conducting a pre-audit of the freight bill is a great way to add value to your organization. Learn more today.
Hannah Testani, Intelligent Audit CEO, featured in McKinsey's series for transforming logistics with data analytics, machine learning & diversity.