"The client should ensure that its funds are as safe as they would be under its own management and control." -- Clifford F. Lynch, author of this whitepaper
There are billions of dollars being circulated around the world for the movement of goods. Some companies spend more on transportation costs than any other expense.
Accounting departments should treat invoices from carriers much differently than the ones from any other vendor. To pay freight bills, it requires knowledge in logistics -- tariffs, bills of lading, carrier contracts, etc.
These invoices need special attention because 3-5% of the time there are overcharges and duplicate charges. Also, by outsourcing freight bill audit and payment, companies pay one-tenth of the cost and get the reconciliation and reporting to better manage their shipping activities.
With that being said, companies must carefully choose the freight bill audit and payment provider. There are a number of areas to review, but most importantly, financial stability. Performing due diligence on the vendor's financials not only protects the company's funds but also gives reassurance that they will not lose money and be indebted to any carrier.
This white paper, "Trust & Verify: Best Practices - Financial Due Diligence and the Outsourcing of Freight Bill Audit and Payment," highlights a number of steps that can be taken to ensure a successful relationship, protecting and minimizing the financial risk to the outsourcer.
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