How Freight Payment and Auditing Services Work
In its simplest terms, Freight Payment and Auditing Services is a collection of several processes that essentially serves as an account payable service in place specifically for transportation invoices. This third-party service will partner with you to handle your invoices from start to finish, acting as a bridge between carrier and shipper to receive, process and pay your transportation invoices as well as audit them every step of the way to ensure you never overpay freight costs.
Attempting to manage this complex process in-house can be very tedious and time-consuming. Partnering with the right freight payment and auditing services company to work for you eliminates the cost of all the additional work hours and fees associated with having your in-house team handle it.
Freight costs account for a vital segment of your company’s financial portfolio, and it can only serve to enhance company performance and increase the bottom line by keeping these costs visible and accurate.
It’s essential for your company to understand the answers to some key questions to give them an advantage against competitors. Understanding who they’re paying, what services they’re paying for, and what goods and transportation modes are covered in the invoice are important points. More importantly, ensuring the invoice and contract terms align is vital. In using this information, your company can begin to look for areas of improvement in both savings and efficiencies.
What is Freight Auditing?
Freight auditing is the tedious and extensive process of reviewing each freight invoice for accuracy, adjusting them accordingly, and verifying their terms for accuracy. Each invoice undergoes a check of all vital information including shipper and carrier information, mileage, Bill of Lading, shipments weights, discounts, tracking numbers, and the price. An audit will also ensure no duplicates are accepted or paid. It is important to make sure final shipping costs are accurate to the quote given initially, so you are not incurring unexpected freight costs on your invoices.
What is Freight Pay?
After an audit of the invoices is performed, a freight payment service will then act as an accounts payable team and forward you a copy of your invoice and pay the carrier on your behalf. This is a simplified process compared to the in-house process of gathering all the various carriers you work with and cutting individual checks to each of them manually.
Working with a third-party company who will own this process for you from start to finish will streamline the entire experience and ensure all aspects of the process run smoothly and accurately.
Most companies that provide Freight Pay and Auditing services also offers an extensive line of other transportation services, keeping transportation as a whole in mind. Your company’s transportation services company will cut out some of the frustration by being able to provide information to both the shipper and carrier, as they will both need information about the shipments. Having a team of people specializing in this for you means much more visibility for all involved parties.
When handled correctly, freight can be accepted into your business plan as a strategic asset, providing a competitive edge by leveraging freight data and the latest technology. Freight Pay and Audit companies can provide extensive reporting to their customers who offer your company the unique opportunity to comb over said reports, filter certain aspects of the information, and use it to determine future choices and changes that will improve their standing.
These reports can also be used to determine pricing for your products. Through this detailed information, your company can calculate how much freight costs are associated per unit, and this can drive better and more competitive pricing on your goods.
You might be thinking that these small costs, maybe only a few dollars per invoice, may not be worth it. But consider how much freight your company moves and how many freight invoices your company is responsible for paying. These small costs can start to add up to a significant amount of money over time. If left unchecked, your company is just leaving money on the table, money that rightfully belongs to their bottom line.
Most Freight Audit and Pay companies allow their customers access any time and can assist with any questions or issues along the way. This individualized attention and specialized set of services enhances customer experience and provides a hassle-free process for handling all of your company’s freight audit and payment needs.
When looking to partner with a freight audit and payment company for your business, keep in mind they should receive the invoice, validate the invoice, capture the appropriate data, audit it for discrepancies, perform cost accounting, manage exceptions, and then pay the invoice as well as provide exceptional customer service to your company when issues arise.