Discovering billing mistakes through leveraged data from freight audits helps shippers identify cost-cutting opportunities through accurate invoicing and payment processing. Freight audit savings might arise from recouping costs due to overbilling, service guarantee failures, or simply using the wrong carrier for each load. Procurement improvements can boost efficiency and visibility. Outsourcing freight audits and payments to proven solution providers that can ingest, cleanse, normalize, and analyze the data from invoices help shippers pay only for the services rendered. In turn, that amounts to several areas where potential savings may exist. Let's take a closer look at these areas to see where and how these savings arise.
To gain a competitive advantage, shippers need to understand the average savings found in a freight audit and follow a few best practices to maximize the recovery. Freight bill auditing can help in instances of double billing and overbilling, and invoice errors, calculated based on your contractual agreements, that are found and eliminated will effectively lower total transportation spending by the same value. In situations where blind shipments were tendered or where multiple bills of lading exist, freight audit savings will be even higher. Most importantly, a freight audit can keep carriers in compliance with the guarantee of service. If the service guarantee is not met, this will result in chargebacks to shippers. Chargebacks can lead to the shippers becoming responsible for refunding customers for a product and customer-paid shipping charges. If a damaged item is found, the shipper can hold the carrier liable, exercising additional caution or using the information to secure better rates for future service. But auditing ensures chargebacks like these are passed along to the actual responsible party, the carrier on a timely basis typically before payment is due.
Through technology investments, shippers can expand and improve data access, potentially resulting in more freight audit savings. Combining deep analytics with consulting expertise to extract insights from the data can improve shippers' strategic decisions, derive more supply chain efficiency, and remove costs. A freight audit helps shippers overcome day-to-day challenges as well, such as understanding current rates, benchmarking performance, and even bid analysis. Due to advancements in technology, all processes have a digital twin that can lead to freight audit savings from electronic invoicing and more embedded processes in freight audit and payment. Ultimately, shippers using electronic invoicing will have more accurate and comparable shipping data, resulting in faster auditing and increased efficiency.
Regularly analyzed billing data can provide shippers with new insights, drive more intelligent decision-making, and increase potential freight savings. The ability to track transportation spend and leverage advanced analytics to identify the average cost by zone, mode, and carrier can result in increased control of shipping spending. Having data-driven insights enables shippers to see how the cost varies based on the origin/destination pairs, which can help avoid waste within the operation. Gathering more external data, coupled with the increase in transparency and accountability afforded by the use of technology, can naturally lead to increased efficiency and new opportunities for improvement by providing data-driven insights to make more informed business decisions.
Ensuring clean and normalized data ensures freight audit payment companies can use the information to power business intelligence and other analytics engines, adding value along the way. Coming from Inbound Logistics, "To enhance these value-added offerings, and help shippers reap greater insight from their data, many freight payment companies are continuously upgrading their IT platforms and professional services." Advanced technology and IT platforms allow for aggregating data and can ensure the readiness for analyzing through cleansing and normalization data. Remember, different systems have different coding algorithms, and the data from one system will appear completely different from the data of another platform. Normalization is critical in that aspect, allowing the data to be compared on different systems to ensure freight audit savings, the literal apples-to-apples comparison shippers need to unlock more value from their tech stack. Normalized data takes out the guesswork of actual costs across all regions, modes, and carriers allowing the user to analyze data quickly and easily.
Carriers want to get paid in a timely manner; however, shippers want to only pay for the services received. Working with advanced software can provide fewer interventions and automatically correct any anomalies and inaccurate GL codes. After the freight audit has reviewed the invoices, streamlining carrier payment with a secure, federally regulated banking institution system for freight finance can lead to less risk and make your freight more attractive to carriers as well.
Using a freight invoice auditing and analytics service also helps reduce the staffing hours lost in manual auditing. Remember, manual auditing involves significant labor costs and is also subject to human error. In many cases, the discrepancies in invoices uncovered may simply not be worth pursuing. However, using a technology-driven, automated approach to auditing allows for faster processing via a strategy that can ingest, normalize, correct, and apply actionable insights to make meaningful improvements. This also includes setting thresholds for variances in invoices to further reduce costs. And since the application of data gives further credence to big data analytics to inform all decisions, freight auditing and payment gain synonymy with IT-as-a-Service. Essentially, your IT teams can rest assured that your data is high-quality and actionable, reducing costs along the way.
Automation within invoice auditing also serves as a central source of truth for managing day-to-day activities. In logistics, a centralized view of spend and communications leads to less confusion and helps your team focus on what really matters — moving freight faster.
Freight audit and payment can provide shippers with the resources needed to sort through the data and only pay for the services provided. Having a secure, data-driven process to remove anomalies, instances of double billing, and maximize performance are mission-critical functions in today's supply chain. Also, augmenting the transportation network's efficiency with actionable data insights and more visibility will only continue to generate more value and reduce risks, cutting costs and increasing savings in tandem. To see the benefits of an intuitive approach to auditing, contact Intelligent Audit 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.
Accountants and auditors know that a freight invoice can be filled with all sorts of errors. Read to learn how to proactively address ten common errors.
Shippers must invest in machine learning tools as primitive logistics technology becomes obsolete amidst artificial intelligence progress. Learn more.