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Reasons to outsource your freight invoice audit

Guest post by: Kenneth Kowal

Article Overview: Reduce Freight Costs: First off - the reality is a lot of freight invoices are incorrect, so they all should be checked. Mileage calculation errors are common and the complexity of fuel surcharge matrices mean that the applicable surcharge changes week to week.

Reasons to outsource your freight invoice audit

Reduce Freight Costs: First off - the reality is a lot of freight invoices are incorrect, so they all should be checked. Mileage calculation errors are common and the complexity of fuel surcharge matrices mean that the applicable surcharge changes week to week. Do a spot check of some invoices and I can promise the wrong surcharge is getting applied on some shipments. Partnering with a resource to help automate this auditing process will make it simple for you. Most freight invoice auditors will claim a freight savings of 2-6% off your logistics spend. I can't verify that either way, but I do agree an opportunity for savings exists. On the high end, you should expect to pay $.80-.85 per invoice, but much less with higher volumes of invoices or using EDI to facilitate the process. This would involve getting each of your carriers to interface electronically with the freight payment company. This is a bit complicated to get started with but will become relatively simple to maintain once the whole process is in place.

Reduced Shipping Administrative Expenses:

Companies conducting their freight invoice audit in-house are using expensive employee resources to ensure carrier invoices are correct - and probably not very effectively. Realistically, a manual freight audit is not able to uncover the same number of carrier audit billing errors and shipping service failures that an automated freight invoice audit process is able to identify. Automating the invoice audit process will eliminate the excessive time currently allocated to these tasks and as a result generate additional cost reduction in time saved. Think about it - how are your carrier rates sheets organized right now? Hardcopy print outs in a drawer? Maybe a spreadsheet attached to an email in someone's inbox? How efficient or accurate is it for someone to be auditing each carrier's invoice by referencing one of those sheets, running the miles, adding stop charges, and accessorials - and doing it correctly? Plus - they need to check this week's fuel surcharge from the DOE website, reference yet another table provided by the carrier, and add that amount to the carrier charge. You do all this for one truckload, when you can automate the process in a way that eliminates the work and the potential errors.

Freight Management & Carrier Reporting:

From a business management standpoint, this is the possibly the most valuable benefit of automating freight invoice audit. Information. The importance of knowing all your freight data is accurate and accessible allows for effective business reporting and use of that data. Understanding your logistics and supply chain costs in detail is vital to effectively running a business. Attempting to manually audit and collect freight data by going through old invoices or a bill of lading is too time consuming and very error prone. Think about the valuable components of freight spend data. The better you understand the cost components that make up your freight spend, the better you manage your business. If you keep getting hit with detention a particular consignee you want to know about it... if freight costs are going up from your ecommerce order fulfillment operation because of fuel, you want to know about that too. Good information is vital to making your business run better.

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Article Tags: Bill of Lading, Routing Guide, TMS, Transportation Management Software



Related Forum Posts
What do you suck at? - I say outsource everything that is outside your area of specialty. If you groom dogs and love it, then you're probably not good at finance, marketing, or IT. It costs you more in time and money to figure these things out than to give them to a professional. As a starting entrepreneur, it's hard to outsource everything. I still do my own accounting, and will until it's unmanageable and/or I can afford to outsource. I run a marketing firm, and I meet so many people who have done their own marketing (inefficiently) for years. There's a reason they come to me. They don't have the time to work on it, or it's not bringing in the sales they want it to. You may be smart, but you weren't designed to do everything.
In-House or Outsource? - I've got a couple of questions with regard to outsourcing: What are the types of things with your business that you can outsource (or which types of businesses should outsource at all)? What are the key risks and advantages of doing so? And how do you find a company that is right for you to work with? Thanks!
Re: Cold Calling - CPM is calculated by a study developed by the Truckads company. As far as the accuracy of this calculation is concerned, I am not 100%. We are planning on commissioning an audit from that TAB or Outdoor Association of Canada as soon as we have the money in our budget. Right now, not having audited figures is a bit of a handicap.
Re: 10 Reasons Who Startups Fail & Book Recommendations - Great post,but please edit the headline. I presume it is "10 Reasons Why Startups Fail & Book Recommendation
Re: In-House or Outsource? - You can outsource a lot of things. Join elance.com for free and they will send you an article on 101 things you can outsource. Outsourcing majority of your tasks make you work smarter. I read that Bill Gates bought the ms dos from someone for $50,000. Now he made billions out of it. This is the beauty and power of outsourcing.


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