No matter the type of business or anyone's job title, everyone in an organization wants to save money and make more profit. One of the best tools to achieve those goals is by using freight audits and payment companies. After researching the best freight audit companies, a big question remains: how do you know which is truly the best? Asking more in-depth questions, such as how the system handles surcharge increases and how easily can it generate proper on-demand reports is crucial. Let's consider some of the top questions to ask when vetting freight audit and payment solutions.
Fuel surcharges, peak surcharges, and dwell time are among the most common examples of accessorials that may be added to invoices. While accessorials might seem trivial, failing to account for them leads to significant increases in shipping spend over time. As a result, not tracking accessorials amounts to leaving money on the table; however, freight audit and payment providers can capture valuable data that provides insight into all accessorials. This helps reduce unnecessary accessorial charges and establishes an efficient process for managing shipments without losing track of total landed costs. Further, the audit will also validate that those accessorials are correctly charged and if they are to the correct amount based on your contractual terms.
The value of any freight bill auditing solution lies in how well its insights can be applied to your day-to-day needs. For instance, invoice matching with analytics can sort through general ledger (GL) codes to validate against billed rates. The best freight audit companies will ensure accuracy and validation down to the SKU level; however, the value of such functions rests with how the system ranks carrier accounting accuracy.
For instance, can the system sort through carriers based on how well the final invoiced spend aligns with quoted rates, or can it help your team identify carriers to use by mode, lane, or other granularities? That's why it's essential to ask freight audit companies more about how their systems rank and drill down into carrier performance. For example, accrual reporting makes it easier for supply chain and finance personnel to know what is to be billed. Further, a great freight audit and payment provider allows shippers to proactively manage transportation spend by providing an estimated cost for any of the invoices that are not yet received so that an accurate accrued cost is recognized.
Another top consideration is how does the freight auditing solution connects to your systems of record and tech stack? Can it operate and pull data from those that rely on EDI, API, and even more traditional means of data-sharing, such as systems that upload data based on a terminal-driven schedule? The best freight audit and payment companies ensure connectivity is not an issue, and that's why more companies are leveraging the value of integrated solutions to provide a comprehensive view of your network spend. And no, integration is not strictly via APIs today as the industry still operates and communicates utilizing electronic data interchange (EDI). With that said, a reputable, modern-day freight audit company will not only ensure connections between systems and partners are in place but will work with your carriers to establish EDI capabilities if they are not in place today.
Even with freight auditing there's little actionability without clear, concise, and meaningful reporting features. Actionable reports mean that stakeholders can know what's needed to improve the current operation and how to lower total costs with a simple view of a dashboard. In other words, it's imperative to choose a freight auditing solution that can generate hundreds of on-demand reports. For instance, on-demand, customizable reports can reveal insight into the average zone, cost per mile, quoted versus landed costs, total spend, and more. Making the data actionable to easily understand is critical to reduce costs, improve service, decrease costly zones, and many other reports to drive actionable decisions for improved outcomes. Take a look at this image below on what great analytics and reporting can do (tell a story). Great actionable reporting cannot happen if data is not first collected, cleansed, normalized, analyzed and then can tell a story of how you can make an impact with decisions that are borne out of data. A great freight audit and payment provider will not just audit invoices and ensure timely payments, but will utilize data and reporting to drive meaningful results for your organization.
Advanced freight audit and payment systems can automatically connect your TMS, WMS and other systems to ingest, cleanse, analyze and apply data. Initiating an audit before an invoice arrives is incredibly valuable. The process begins prior to payment, which helps shippers avoid paying invoices erroneously and without a freight audit, which lowers total shipping spend as well. Of course, it's also valuable to know whether the system can initiate claims or corrections procedures automatically with the ability to pull in more data files for a deeper audit such as TMS feed or manifest feed.
Depending on the type of goods being transported or the shipment destination, diverse modes of transportation become essential. With more modes, it is critical to have the ability to analyze shipping data and proactively manage transportation spend. Whether the goal is to reduce overall spend through process improvements or identify problem areas, the data needs must be ingested, cleansed, normalized and analyzed. Once the data is collected, freight audit and payment companies have the ability to cleanse and correct data to prevent the risk of data duplication or mislabeling, which are more common in multimodal shipping. Data cleansing fixes or removes data that is incorrect, corrupted, incorrectly formatted, duplicated, or incomplete within a dataset. That's why it's critical to choose a freight auditing solution that works regardless of mode.
Another concern is how actionable the data is and whether it can be useful to today's operations. For example, having correct shipment consolidation of the parcels to leverage ground more often allows for the option of zone skipping. Meanwhile, other choices like hub injection will enable shippers to combine parcel distributions and ship them together to the destination region. For zone skipping and proper decision-making, such as when to use a parcel or air shipment, there must be a strategic data stream that's reliable and continuously putting the best path forward for your team. And speaking of teams, the value beyond the data comes from the account management and executive teams having deep experience around shipping data and transportation analytics to serve as a guide to teach the shipper how to best apply the actionable insights uncovered, offering an ongoing continuous improvement program.
What if the question is how to save the most amount of money? The answer is to partner with the best freight audit company. To get on track and avoid accessorials or unnecessary costs, it's time to unify your tech stack with the best financial resources in the industry. To achieve those goals and get started immediately, contact Intelligent Audit.
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