Best practices don’t only apply to businesses. Freight audits are a significant component of a company’s daily operations. Some companies do the entire process in-house, while others rely on third-party audit services to get it done.
Conducting an appropriate freight audit can uncover key cost-saving opportunities and a chance to improve the entire logistics process. They can also help companies keep a solid relationship with couriers and potentially get generous discounts on their next shipments. That’s why some best practices must be in place to ensure the freight audit is conducted properly.
Use electronic invoices
Dealing with paper invoices is an issue. From lost invoices to duplicates, they can create an uncontrollable spiral of chaos. Keeping these invoices in electronic format can help avoid duplicate invoices. Electronic invoices come with a unique consignment number that allows companies to sort them out properly. This makes it easy to audit invoices with software. You can plug invoices into the software without having to convert the invoice. Electronic invoices simplify the process.
Increase the visibility of your logistics costs
You want to know where you’re incurring added costs and whether there are any additional surcharges or hidden charges due to delays in shipping. Even a small accidental weight increment could translate into thousands in operational expenses down the line. With a proper freight audit, companies can group their operational costs into categories to visualize data at a glance.
Uncover opportunities within your supply chain logistics
By analyzing insights from freight invoices, you can accurately predict how to improve processes along your supply chain. For example, you can consolidate your loads in one freight when dealing with multiple containers, saving substantially on freight costs. However, suppose you detect any other inefficiencies in your supply chain, and costs start adding up. In that case, a freight audit can highlight any red flags to watch out for. If you dive into a freight audit with this resolutive mentality, you’ll experience improved efficiency down the line.
Standardize freight rates
Don’t get lost in the mud. Companies usually deal with multiple freight rates. Ensure you have a proper system to set up freight rates, limit the number of accessorial costs, and harmonize cost mechanisms. This will limit the amount of overspending you incur each month and help you maximize gains.
Control your costs
To manage logistics budgets effectively, companies can control their costs by carefully reviewing each invoice item. As a result, they can negotiate rates with their courier, or avoid overbilling issues, while substantially cutting transportation costs. In addition, if you conduct the courier invoice audit the right way, you can get refunds on overbilling faster. That’s why it helps if you implement a well-designed and efficient freight audit system to control your budget.
Implement advanced duplicate protection controls
Shippers receive and review thousands of invoices per year. Instances of duplicate invoices are not uncommon. During a freight audit, businesses might miss instances of duplicate invoices.
Businesses can add a unique purchase order number on top of their invoices or include the type of charge on each invoice. This will help determine if an invoice is duplicated.
In addition to their regular freight audit system, having advanced control systems will prevent unnecessary instances of overbilling.
Compare old charges against new charges.
Sometimes, businesses can expect price hikes, generally due to the rise of fuel prices. Comparing old charges against new ones will give companies a sense of the price difference. Furthermore, it allows them to think of cost-cutting strategies for further shipments.
Conduct a freight pre-audit
Businesses complete pre audits before paying for shipment. A pre-audit helps companies check whether discrepancies exist between the freight contract and the items displayed in the invoice. That way, you can avoid problems incurred after paying incorrect invoices.
Conduct a monthly freight audit
Even a few dollars in freight invoice mistakes can cost businesses thousands along the line. Companies that handle thousands of invoices a month using an audit software solution streamline the process and avoid small mistakes. Conducting this audit process monthly will ensure there are no invoice errors.
Also, if you decide to outsource the freight audit process, find out companies that understand the local market in Australia. They might help you identify cost-saving opportunities by identifying problems with contracts, help you find the cheapest couriers, negotiate with multiple couriers, and more. Avoid overpaying by having an Australian Auditor take care of the process.
Following these freight audits, best practices will ensure businesses are equipped with tools to detect invoice errors. Keep these in mind while handling invoices.