Freight invoice auditing is a key concept you should be aware of especially if you or your company is into shipping things regularly. This type of invoice auditing is something shippers have been using for years to truncate the costs carriers charged and make much more efficient deliveries to end users.
That said, a UPS freight audit or auditing on any other shipping company is not only about saving shipping expenses. It also provides business intelligence that permits firms to view and assess their shipping practices in entirety. This makes possible better transportation choices, more customized and faster deliveries, and happy customers. An important benefit is auditing equips shippers with information needed to negotiate discounts and lower rates with prospective or existing carriers.
Auditing your parcel shipping and freight invoices is a cost-effective move. Invoice auditing’s primary feature is that it recovers its own cost, and usually manages to save at least three times more than the expense. The savings are instant since prepayment audit fees are transaction-based and also dependent on the volume and format. Fees are typically a dollar and 50 cents for paper and digital invoice, respectively. Since audits lead to alterations as soon as the process starts, the savings are instant.
Almost 50 percent of American shippers utilize freight invoice auditing or an in-house auditing system service. The remaining 50 percent could join the party soon thanks to software that is being built by some major freight audit companies.
Before this, setting up an in-house system wasn’t easy and it was also overshooting the budget of several firms. A good amount of analysis and reconciliation was needed after payment against an invoice. Modern-day freight audits are usually pre-audits, which means the bill is checked before payment is done. This makes way for a simpler process and more leverage to remit the correct sum.
Besides the direct savings provided by an audit, significant savings relating to internal administration are also up for grabs. Studies exhibited that the costs a firm incurs on carrier invoice processing averages just above $11. The process starts at envelope-opening and ends at payment sent, with several in-between staff actions such as invoice receipt and sorting, matching invoices and bills of lading, checking discounts, verifying weights, auditing rates, coding bills for entry into ledger, issuing and sending checks, entering data, and interacting with carriers on their invoices’ payment status.
All these tasks could be streamlined, automated, checked and verified and also outsourced – which is exactly where audit firms make their presence felt. These services utilize computerized auditing and processing, electronic invoicing and electronic payments.