Supply chain companies are always looking for ways to lower transportation costs. In fact, it is more crucial to do so in 2022 than ever before. While reducing transportation costs even slightly can have huge benefits for a supply chain company’s bottom line, finding and implementing these solutions is rarely an easy task.
One way companies may be able to save money on their less than truckload (LTL) shipments is by conducting thorough and routine LTL freight audits. According to this article, incorrect freight bills occur between roughly 5-6% of all invoices, often resulting in higher transportation expenses.
Although conducting more thorough audits of all freight bills may sound relatively easy, as it turns out, carrying out routine LTL freight audits can put added stress on internal teams.
In this blog post, we’ll go over some tips to help you navigate the inner workings of a standard freight audit and help guide you along the best way to handle your LTL freight audits.
Navigating LTL Audits
LTL audits aren’t as straightforward as full truckload audits.
Full truckload freight audits are, for the most part, fairly straightforward. With LTL shipments on the other hand, there are a few extra variables to consider when it comes to performing an LTL audit. A hurdle you may encounter with LTL audits is overcharges include paying for hidden LTL accessorial fees, the wrong dimensions, and the wrong base rates and negotiated discounts you may not otherwise encounter as frequently with other shipping methods.
But fret not, once you have performed a few LTL freight audits, the process feels less daunting overall and will help your business immensely.
LTL Audit and Pay Services
Freight payment and auditing services are third-party solutions that will manage your invoices for your company. These services generally take over the entire process for you. Finding a less than truckload audit and pay service specifically for your LTL freight audits will take the burden off of your in-house team.
Third-party LTL audit and pay services will be sent all LTL invoices along with copies of original contracts. This is to cross-reference the two for any errors using their software. Then, if any overcharges are found, the third-party service provider will use their supporting documentation to dispute the overcharge. Once once the error is corrected will your team see the invoice as ready to be funded. Payables processes are streamlined by creating one payment to the service provider, who then executes multiple shipments to each individual LTL carrier.
This solution allows a third-party to handle all aspects of billing and validating invoices. Freeing up your team to focus on higher-priority tasks, while also ensuring that you are not paying more than you agreed to is a win-win situation.
In-House Audits with Freight Audit Software
An internal LTL freight audit involves the collection of all LTL invoices and validating them against the original negotiated contract. A combination freight audit process is strongly recommended. This sort of system utilizes auditing software along with employee aggregated data to verify errors. This ensures that the process is both fast and accurate as using only software may result in gaps in the full scope of things, and manually processing invoices is too time-consuming.
If your in-house team is performing the LTL freight audit, then the software will compare the originally agreed-upon price for every LTL contract to the final invoice. If any discrepancies are found, you can easily correct them.
If your team is finding overcharges, make sure that the carriers are notified immediately. It could be a simple error or they could’ve increased their rates. Either way, the discrepancy should be dealt with as soon as possible to avoid overcharges in the future.
Let the team at Redwood help you navigate your LTL freight audits
Want to take you LTL freight audit process to the next level? Reach out to our LTL team at Redwood Logistics and let us show you how you could better optimize, initialize and implement a more streamlined and accurate auditing strategy.