What is a freight bill audit, and why do I need one? In order to answer this question, let’s start by contextualizing the problem.
According to a recent report, incorrect freight billing affects somewhere between 5-6 percent of all freight invoices.[1]
These errors can stem from a variety of different sources, but three main errors make up the vast majority of all invoicing mistakes:
Because billing errors generally go unnoticed, it’s virtually impossible to know how much money these errors could be costing your business each year.
However, freight bill audit data can begin to give you a better idea. One recent study suggests that adopting a freight auditing process to identify and remedy many of these errors can help businesses recover up to 5 percent of their freight costs.[2]
Without a proper audit process in place, these costly errors and overpays equate to unrealized revenue your company is literally giving away - for free.
Most freight audit services are executed by a third-party provider. As part of the bill review process, the chosen provider deploys automated software that combs through each freight bill to closely examine and verify it for 100 percent accuracy.
When errors are found, remediation mechanisms are activated that enable both parties to rebill the LTL freight charges quickly and accurately.
Firms that audit LTL invoices must compare the rate on the invoice with the details of the pricing agreement between the shipper and the carrier.
It is fairly easy to compare the itemized accessorial charges, but how do you efficiently compare the correct application of base rates, discounts, FAKs (Freight-All-Kinds), and minimum charges across hundreds or thousands of bills? One answer is SMC³’s BatchMark XL.
[1] How to Tackle the Freight Invoice Management Obstacles
[2] Why Freight Audit Is Becoming Increasingly Important in the APAC Region
BatchMark® XL provides access to the industry’s most comprehensive library of more than 4,000 carrier-specific tariffs, 3rd party base rates and CzarLite® - to ensure accurate freight billing across every carrier agreement. Upload the shipment and pricing program details and BatchMark goes to work, quickly rating thousands of bills per minute.
In addition to uncovering potential freight bill invoice errors, BatchMark XL can assist with price negotiation and planning, enabling users to:
For a closer look at our BatchMark XL freight bill analysis tool download our paper, including; BatchMark XL, CarrierConnect XL, and CzarLite.
Related Papers
Analyzing and Predicting Freight Transportation Costs
In these 3 resources, BatchMark XL, CarrierConnect XL, and CzarLite, we detail how to ensure accurate freight billing across every carrier agreement, uncover potential freight bill invoice errors, and assist with price negotiation and planning. Download Now!
Reinventing the Freight Transportation RFP Process
In this white paper, we describe how using a tech-enabled freight bid system allows for more freight providers to be considered, greatly improving choice and the ability to tailor your service around more than just price. Download Now!
Bid$ense: Streamlined Transportation Sourcing
This paper details how using Bid$ense leverages SMC³’s lifetime of transportation purchasing knowledge, allowing customers to incorporate pricing, claims ratios, on-time performance, and transit times into their LTL bidding analysis. Download Now!
More SMC³ Resources