Has your CEO recently asked how much money your firm loses on incorrect or duplicate invoices from your carrier base? Do you know where to turn for answers?
Typically, 5-10% of all invoices are billed incorrectly. Errors include duplicate invoices, overpayments, rate errors, freight billing errors, excess detention charges, unapproved and uncontracted supplemental accessorial charges and spot quote payments on lanes with contract prices – and that’s just a start.
Post-auditing is a risk-free, contingency-based process that can discover those errors and save anywhere from 3-10% on freight spending. Here are five solid reasons why your company should pursue post-auditing, which could yield annual savings of six figures or more:
- Beyond finding duplicate invoices, post-auditing discovers where carriers billed the wrong amount based on agreed tariffs, lanes and assessorials.
- To discover if any carriers constantly overbill or bill incorrectly, giving you needed data for strong KPIs for your carrier scorecards.
- Post-auditors can go back two to three years to recoup excess payments and duplicate invoices – a great way to quickly find 5-10% savings.
- To enhance your preaudit and pay provider’s ability to flag issues early in the process.
- Post-auditors cost zero dollars and minimal effort from you. You share any savings you find – so you don’t need to find extra money in your budget.
Your pre-auditing service should ensure that your rates are correct. But they rarely have all agreed-upon assessorials or when they apply. They also have no visibility into duplicate invoices, partial invoices or any side agreements conducted via email – changes that happen all the time – the list goes on and on. Carriers sometimes automatically send a second bill if the first one is 30 days past due. Post-auditors can put all those together to discover errors that slipped through in the beginning.
No, your carriers are not trying to scam you. But international and domestic freight and parcel billing, by their very nature, are confusing and complex. Confusion plus complexity often equates to inaccurate billing and excess cost. Post-auditing the convoluted trail of invoices, shipping manifests, receipts, rate tariffs, etc., is difficult, time-consuming and requires specialists.
Companies I’ve talked to discovered that confusion during the pandemic caused numerous duplicate invoices, not to mention errors from incorrect pre-auditing. Catching problems post-audit provides long-term benefits by allowing your team to fix those issues on the front end with your preaudit and pay provider.
That data should go on your carrier scorecard – on-time delivery, billing issues, damages. If you have carriers that overbill $500 almost every load, your firm only gets $300 of that back – the other $200 goes to the post-auditor. Losing $200 a load means you need better rates with your next RFP (request for proposal).
I have seen companies with large freight bills add millions of dollars to their bottom line with zero work required. But if your post-auditor finds few issues, you can rest easy knowing that you have a solid preaudit and payment company at your side.
I would love to discuss how post-auditing can help your company. You have nothing to lose and possibly big dollars to gain.
Chief Operating Officer Mike Royster has over 30 years’ experience managing Logistics and Distribution on a global basis for companies like Ingersoll Rand/Trane, Eaton Corporation, and XPO Logistics. Mike now leads Tompkins Ventures’ global logistics and consulting practices. Reach him at [email protected].