Many companies are hesitant to deploy a Freight Audit solution as they believe they can solve the billing issues with some quick tricks and talks with carriers.
They don’t realize that poor invoice quality often has much more deeper root causes which require fundamental changes on the Carrier’s behalf mostly but also on the shipper side.
Below we highlight 10 reasons which are the main drivers for the low quality of carrier billing.
- Contracts are unclear or missing crucial data leading to different interpretation
- High level of (unnecessary) complexity in contracts and rate structures
- Limited understanding of rates and business rules often among both Shipper and Carrier
- People with limited knowledge of logistics knowledge in billing
- Carrier Account Managers are not in sync with the Billing department and barely communicate with each other
- There is limited process control on the side of the carrier for rate updates and change management in contracts, contracts and rates do not get updated
- Manual errors are occurring as workarounds in calculation are created due to lack of system flexibility
- New accessorials or lane updates pop up in invoices without approval
- Poor shipper order data could lead to wrong calculation
- Carrier has become used to usage of tolerances by the shipper
There it is, short and simple. However with big consequences. When we come in to analyze rates and contracts before we upload it into our system we find many gaps. When we move to processing of invoices we often find more.
Eventually, we will bring it all in line while saving on average around 3-5%. Cleaning contracts is typically something you cannot do without specific knowledge from an external partner and Freight Audit & Payment companies are very well positioned to deliver great value in this area.
For questions or advice feel free to contact our Global Director Business Development via firstname.lastname@example.org
Pieter Kinds is a Freight Audit professional with over 14 years in the business. He is the Director of Business Development for ControlPay, the largest Freight Audit provider in Europe.
About the Author
Pieter Kinds (41) is Director at ControlPay, a global Freight Audit provider and the CEO of TenderTool, a cloud-based logistics sourcing platform. Active for over 14 years, Pieter is eager to share insights, thoughts and experiences via his blogs.Follow ControlPay on Twitter More Content by Pieter Kinds