Whether you're managing a small e-commerce business or a large multinational corporation, accurate and efficient invoice processing is essential to ensure that you're paying the right amount for the goods and services that you need. With so many factors to consider, however, it can be challenging to keep track of all the details. It is when this happens that mistakes can easily slip through the cracks. One of the most common areas people have trouble with is invoice auditing, more specifically, parcel invoice auditing.
Knowing how to properly audit or create parcel invoices is critical. Even if you already deal with various other types of invoices for your business, when it comes to parcel shipping invoicing, there are a handful of best practices you should strive to adhere to.
In this blog post, we'll discuss the best practices for parcel invoice auditing, including the key elements you should look for, some common pitfalls to avoid, and a few tips for making the process as smooth and streamlined as possible.
Before Doing Parcel Invoice Auditing, Start with a Clear Understanding of the Invoicing Process
Before you begin auditing parcel invoices, it is important to understand exactly how the process works and what it looks like when it is in good working order. This includes understanding the various components of the invoice, such as the shipment details as well as fees and other charges.
Additionally, you should be familiar with the invoice format used by your carrier and the information that should be included on each invoice. It is not safe to assume that an invoice from one partner is going to contain all of the same elements. Of course, there will be core commonalities but there are also going to be some key differences. Understanding this and communicating it clearly with your carrier will go a long way in helping you quickly identify any discrepancies or errors and ensure that you're reviewing all the relevant information.
A standard parcel invoice will include all of the basic information such as the name of both parties (shipper and receiver), the date it was shipped, zone information and any services attributed to the handling or movement of the parcel. It will also include a description of what is being shipped along with its dimensions and weight class. Any additional information or requirements are likely going to only be those that are specific to your chosen carrier in some way.
Verify Accuracy of the Shipment Information
One of the key elements of parcel invoicing is the shipment information. This is, arguably, the most important section of the invoice. It is this information that is used to properly calculate the shipping fees and should be accurate and up-to-date.
When auditing parcel invoices, you should verify that the shipment information matches the actual goods that were shipped. This includes not only checking the weight, size, and destination of each parcel but also ensuring that any special handling requirements are reflected in the invoice.
Review All Fees and Charges
Once you've confirmed the accuracy of the shipment information, the next step is to review all the fees and charges on the invoice. This includes looking at the shipping fees, as well as any additional charges such as fuel surcharges, delivery confirmation fees, and special handling costs.
It's important to ensure that each fee is correctly calculated and that the total amount on the invoice is accurate. You should also check that any discounts or credits are properly reflected on the invoice and that you're not being overcharged for any services.
Check for Duplicate Invoices and Overcharges
Another common issue in parcel invoicing is the presence of duplicate invoices or overcharges. It is a fairly commonplace mistake but it is one that is easily identifiable. This issue typically occurs when the same shipment is invoiced multiple times or when charges are added to the invoice by accident and these are usually just simple user errors when drafting details in invoicing software.
To prevent this from happening, it's important to regularly check for duplicates and overcharges on your invoices and to address any discrepancies as soon as possible. As invoicing and shipping software become more advanced and more companies become digitized, this issue is likely to be on the decline in the near future.
Utilize Automated Tools and Logistics Software Designed For Performing Invoice Audits
While manual parcel invoice auditing can be time-consuming and prone to errors, automated tools and software can help streamline the process, reducing the risk of costly supply chain mistakes. There are several solutions available that can automate the invoice auditing process, including invoice matching software and parcel shipping management systems. These tools can help you quickly identify any discrepancies, flag any errors, and ensure that your invoices are accurate and up-to-date.