Unless you can justify the cost of conducting freight invoice audits, i.e., how much was recaptured, it will likely cost more to manage the program in-house than to leave the money in the hands of carriers. That’s where an outsourced program can add even higher value, and when paired with automated functions and auditing tools, recapturing costs becomes a cost-effective process. That reason alone reveals why more companies opt to outsource auditing and let a proven partner handle the process.
Invoice Auditing Is a Best Practice in the Industry
Invoice auditing is best practice; that much is clear. Unfortunately, invoice auditing programs are not equal. It is not enough to review invoices for accuracy. With error rates up to 25%, that amounts to up to 25% higher freight spend than necessary. Since the industry already struggles to stay profitable, no thanks to Amazon’s relentless push to guarantee service, such rates are unacceptable.
Implementing an invoice auditing program also comes at a cost. Companies charge a percentage of recaptured costs as the fee for auditing. While this may not seem like a sacrifice, it remains far less than the charges paid by the shipper to the carrier in the first place. However, for some modes, like LTL, at Cerasis, we don’t have gain sharing in place. When we audit an LTL freight invoice as part of our total transportation accounting solutions, we get it corrected, and you aren’t charged a fee. This service comes with being a customer of Cerasis and with the use of our TMS, the Cerasis Rater. However, as most parcel invoice auditing firms do, we have a gain-share program on parcel invoices where money is recaptured, due to the automated nature and volume of invoices audited.
How Does Carrier Invoice Auditing Translate into Business Benefits?
Implementing a freight carrier invoice auditing program offers several advantages to businesses, including:
- Reinvestment of recaptured revenue into supply chain management technologies or services.
- Improved customer service levels, holding carriers accountable for guarantees for on-time delivery, and more.
- Avoiding disruptions to current processes when outsourcing auditing to a third party.
- Reducing the costs of managing per-transactional, cost per hundred-weight freight spend.