Savings Derived From Double-Billing Instances
The instances of duplicate invoicing, also known as double billing, forms another major issue for modern freight management. Depending on the source in question, the rate of double billing may affect up to 2% of all invoices. Due to the nature of double billing, any percentage increase affecting the error rate will add to freight spend to the value increased. In other words, a 2% increase in the rate of double billing increases total freight spend by 2%. Meanwhile, instances of overbilling and double-billing that are eliminated effectively lower total transportation spend by the same value. Of course, the risk of double-billing is more pronounced in blind shipments where multiple bills of lading exist, notes Inbound Logistics.
Savings Derived From Recognizing Failures to Meet Delivery Guarantees
Most importantly, a freight bill audit keeps carriers in compliance with their guarantees of service. Despite the differences in carrier relationships, most carriers offer some form of guarantee of service. Failure to live up to that guarantee will naturally lend itself the need for chargebacks. These chargebacks are even more profound as shippers can become responsible for refunding funds for the product to customers, as well as customer-paid shipping charges. The same principle applies to lost and damaged shipments too. If a freight bill auditing function uncovers an instance of damage, the shipper can also hold the carrier liable, exercising additional caution or even using such information to secure better rates for future services.
Savings From More Profitable Staff in Your Facilities
Another arena of savings exists for outsourced freight accounting and bill audit practices. Since staff members spend more time working with customers and encouraging sales, implementing an outsourced freight auditing program leads to higher profitability. While this is not necessarily savings, the increased revenue compared to not implementing a program at all is considerable.
Reduced Risk of Customer Losses, Saving Money on Acquisition Costs
As the rate of losses and delivery failures declines, carriers will be more inclined to rectify any issues. Carriers will take additional steps to hold drivers accountable and prevent future failures. As a result, customer service levels and satisfaction rates increase, reducing the risk of angered customers. In a sense, this saves money by keeping acquisition costs under control. Since customers are more likely to make repeat purchases, total profitability increases, leading to lower customer acquisition rates as a percentage of total profits.