Freight Audit: The typical in-house pitfalls

June 10, 2015 Ken Klaver
 
 

Freight Audit is nowadays generally considered as one of the most important tools for reducing rising logistics costs.

A recent study shows that 80% of top logistics and supply chain managers consider freight audit the ideal road to improvement and control of logistics costs, leaving other characteristics far behind in the survey. Nevertheless, the questions that remains…how are companies going to achieve a well structured, transparent and efficient freight audit trail?

There are two options for freight invoice auditing:

1.      Inhouse

Own staff checking, processing, coding and paying freight invoices.

-Manually or

- Using in-house software (TMS).

2.      Outsourced

A third party checking, processing, coding and paying freight invoices on customer’s behalf.

Almost 50% of the companies that have the capacity to gain considerable benefits from freight  audit are currently using an outsourced provider.

The graphic below shows the usual pitfalls companies stumble against when they decide to audit their freight invoices In-house, versus the specialized and fully dedicated approach of a third party. 

Almost 15 years of FA experience has thought us that this specialized, and time demanding line of work, brings a lot of difficulties if kept in-house.

The results of in-house freight invoice auditing 

  • Inefficiency and a variety of processes
  • Not having the desired visibility in multiple areas (shipments, spend, process)
  • Overpayment
  • Lack of control
  • Room for interpretation of business rules, calculation rules
  • No tool in place to properly audit complex business and calculation rules
  • Analyses potential is limited
  • Non-transparent audit trail
  • Dependency on the admin performance of your carriers
  • Annoying manual work, delays and long-lasting issues

Benefits of working with a freight audit provider for finance - logistics and carriers


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