The transportation and trucking industries are continuously evolving. According to the American Trucking Associations, "Trucks move roughly 72.5% of the nation's freight by weight." And that number is growing as e-commerce expands and more companies look to leverage ground versus air transportation to save on shipping spend. However, that complexity means an added degree of importance in all freight in accounting processes.
As uncertainty plagues the industry, including the changes around California's AB-5 legislation in summer 2022, it's time for shippers to understand the tenets of proper accounting practices. Let's take a closer look at what freight-in accounting is, why it relies on data integrity and accuracy, and a few best practices for managing it successfully.
Freight-in is the literal definition of the costs associated with moving goods from suppliers to a receiver. That receiver may be a storefront, distribution center, urban fulfillment center, or residential delivery. As a result, freight-in accounting tracks and validates the costs associated with those movements before, during and after delivery.
Freight-in accounting is often used interchangeably with "freight accounting." However, the complexity of freight management today, including a global network of suppliers, tens of thousands of potential carriers, regional and local services, and varying service level agreements, makes freight accounting subject to incredible risk for error. The slightest problem or mistake in data entry or sharing may result in compounding issues that add up to massive losses in reports. It's not just OSD reporting or standardized risk that goes into freight accounting; rather, it's the total sum of all costs and their accuracy as well as usefulness that helps retail supply chain leaders understand their true profitability after transportation expenses.
Freight auditing is a simple principle that increasingly solves many problems associated with freight and logistics. Once considered complex, time-consuming, and tedious due to having to audit each activity manually, freight auditing has become much less burdensome thanks to advancements in artificial intelligence and machine learning. New software developers have established a clear and concise process for comprehensive tracking, reporting, and auditing all freight data across all systems. For example, Intelligent Audit has spent years perfecting the process of tracking, understanding and applying freight accounting data to generate actionable insight for shippers. However, leveraging a few best practices for improving freight accounting in the day-to-day grind is always beneficial. These best practices include:
Freight accounting is always going to be necessary for the modern supply chain. However, advanced platforms and service providers, including Intelligent Audit, are reshaping how the everyday shipper approaches accounting from a data-driven perspective and helping to drive shipping spend into retreat. Learn how your organization can take advantage of those functions by connecting with an Intelligent Audit expert today.
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.
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