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How to Audit Your Freight Bill: A Few Tips



The internet boom and the invention of eCommerce signalled the decline of the conventional stores &retail outlets across the globe with companies like Amazon leading a push into new, modern&online markets. Because of this massive shift within the industry and the emphasis placed on delivering goods or products has made freight carrier a key player.

With the increasing demand of door-step delivery, retailers and vendors are more reliant upon their freight carrier. So, shipping rates have risen to fulfil the demand.

Study reveals that shipping charges can make up to 10 percent of a company’s total expenses. Companies are spending millions or tens of millions of dollars annually to ship their products from one location to another. The key players in logistics and transportations like UPS and FedEx. But do you know it’s common for major shipping carriers to overcharge?

If you’re a retailer or vendor, there are certain aspects of logistics that you should not only be aware of but also be able to handle yourself. One of the extensive force you should have at your disposal is the ability to examine/audit your freight bill to identify opportunities to cut costs, increase efficiency, and keep your carriers honest and accountable. 


In the world of AI (Artificial Intelligence) &big data, a decimal point can make all the difference.

What is Freight Bill Audit

Freight bill audit is the process of examining and validating a carrier’s invoices. Through the process, a shipper can verify the accuracy of carrier’s bills. Though, it is quite simple; your aim is to pay the freight charges you actually owe. An audit will be initiated after the freight invoice is received and payment should only be made after auditor has confirmed the accuracy of the invoice.

The Difficulty of Freight Audits

Overcharges occur in a number of ways. Some are really harder to detect than others, since you need to know what you’re looking for.

Auditing freight bills are a complicated process, made more difficult by volatile fluctuations in global fuel prices. Very few industries’ rates are as indistinguishably linked to one factor as the transportation industry is to the cost of fuel. Because of volatile fluctuations in global fuel prices, your shipping cost will rise and fall with the cost of transportation, which is directly tied in with the current price of oil. An integrated auditing system ensures the following checks:

Beginning The Freight Bill Audit



Freight bill audit is typically categorized as pre-audits, which allows the bill to be audited before making payment. It helps shippers to gain comprehensive leverage and an accurate way to pay the exact shipping cost.  

Discount verification: During the audit, you need to make sure that the discounts on the invoice should match with the discount mentioned in your price agreement with the carrier.

The overall calculation: After verifying that you have been charged for all of these categories correctly, make sure that the net and gross total add up correctly.

Late delivery: There must be many basic clauses agreed between you and your shipping company for example there must a clause how much penalty you have to impose on your shipper in case of late delivery? He has made a late delivery he must be penalized according to the agreement. It saves good money for you plus you will get in-time delivery in future.

Duplicate invoices: These are extremely common errors in the freight industry. There are number of ways to deduct. A few of them are enlisted below:

·         Invoices with identical or similar amounts
·         Invoices that have identical PO and BOL numbers

Improper accessorial charges: You should avoid to pay invalid accessorial charges that have been waived in your agreements.

Proper Classification: There are four factors of classification, density, liability, handling, and stowability. The classes have their own different rates, so it is important that you ensure your freight is being appropriately classed and charged accordingly.


Number Of Ways To Audit Your Freight Bills

Internal Team: A shipper may recruit an internal team and perform audits. Conceptually, this is a possible route, it is likely the least cost-effective/efficient model. Manually auditing carrier’s invoices can be a tedious affair.

Outsource your audit – If you do not want to deal with the various costs associated with internal freight bill audit, you may contact a third-party freight audit company to focus on your core specialties rather than checking for discrepancies and recovering costs. Most of the time, this route is more cost-effective method, since it allows you to focus on your core business functionalities specialties rather than allocating your time & man-power on tasks they are not ideally suited.


What Are the Key Benefits of Freight Invoice Audits?


Whether you select the options of using an in-house auditing team, or a third-party auditing team, auditing your freight invoices, you will not only recoup the cost of auditing, but you will stop overspending on shipping.Apart from remarkable saving in shipping costs, the additional benefits of freight bill auditing are enlisted below

·         Spot & eliminate discrepancies that may affect your bottom-line.
·         Greater competitive advantage
·         Improved focus on core business
·         Increased efficiency 
·         Controlled costs 
·         Increased Reach 

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