Carrier-Unique Terms Make Auditing Seem Like a Second Language
Another problem exists with different transportation terminology and ways in which carriers describe their services. No law defines how a carrier must describe each function. While generalized terms exist, each carrier does have governance over names for services, guarantee terminology, and more. The variety between carriers can create some confusion, and carrier-unique terms can make auditing a simple invoice feel like translating a complex language.
Moreover, managing internal freight carrier invoice auditing also limits how audits are conducted. It is not enough to audit a freight invoice for accuracy. Shippers should also review if the shipment was delivered on time, according to original specifications, paid in full and on time, and more. Failure to consider the full view of each invoice effectively leaves money on the table. Some invoice auditing companies may offer an arsenal of services designed to benefit freight accounting.
Different Dispute Procedures Complicate Auditing Freight Invoices
Carriers may also have different preferences and channels for managing disputes or contesting invoice details. An effective auditing program must know the unique process for requesting chargebacks, verifying freight data, and other factors. Failures in any step could result in a denial of repayment. This is part of what defines the complexity and headache of handling freight invoice auditing internally.
Little Time for Managing Audits Leads to Overworked Staff
The growth of e-commerce and generalized demand within the logistics industry forms another reason for outsourcing. Since an internal program effectively puts the burden of auditing on your staff members, workloads increase. In today’s age, the staff is already overworked, and adding to the strain will only lead to higher employee turnover rates and lower employee satisfaction levels. This creates a significant problem for supply chains operating with limited workforces, and in recent years, the talent shortage has become a key talking point. Implementing an internal freight auditing program could worsen the problem.
Errors in Staff Audits Contribute to Higher Labor Costs
Internal staff handling audits may sound like a good idea on paper. Unfortunately, mistakes made by internal team members still occurred while those staff members were working. As a result, the labor costs for conducting audits increase, and when these errors occur, shippers cannot recapture the labor costs. The opposite is true with the outsourcing of logistics services; outsourcing effectively only charges a percentage of expenses recovered. In other words, shippers are not out any money if the invoice is handled incorrectly or incorrectly. Only when the invoice is corrected, and a chargeback is completed does the shipper pay for the service.
Internal Processes Lack the Big Stick
Another problem goes back to the idea of a “big stick.” In the realm of e-commerce and the modern supply chain, shippers can be any size. Small and midsize shippers may lack the capacity and negotiating power to hold carriers accountable for invoicing errors. Meanwhile, dedicated auditing services are generally more extensive and can more easily “force the carriers’ hands.”