Freight Audit: The True Cost of Getting It Wrong

Freight auditing is an essential element of a healthy supply chain. Without conducting freight audits on an ongoing basis, it’s impossible for shippers to know exactly what they’re spending—and whether they’re overpaying.

While it is possible to audit your freight bills in-house, handling this process manually leaves a lot of room for error. Freight auditing can be a time-consuming and tedious process and one which places an unnecessary burden on a company’s already busy accounting team. When that team is tasked with sifting through hundreds or even thousands of invoices every day on top of their other work, it’s inevitable that mistakes will slip through the cracks.

When mistakes go unnoticed, they quickly add up.

The majority of invoicing errors aren’t the result of malicious intent, but of simple human error. Unfortunately, that same human error can creep in during a manual audit—and even the smallest mistakes quickly add up.

Say a shipper has negotiated a discount with one carrier that impacts all freight of a certain class—but someone on the carrier’s end forgets to apply the discount when they bill. If the person auditing on the shipper’s end isn’t aware of or has forgotten about the agreed-upon discount, the undiscounted invoice will be processed and paid, potentially costing the shipper hundreds of dollars more than it expected to pay.

Now let’s say the carrier has forgotten to apply that discount to multiple—or even all—of the applicable shipments. If the auditor didn’t realize a discount had been missed the first time, they’re unlikely to spot it on subsequent invoices. As a result, the shipper is no longer just paying a few hundred dollars more than it has to—it’s overpaying a few hundred dollars time and time again.

This is just one example of an avoidable and costly mistake that’s all too easy to miss during manual auditing. Between base rate discrepancies, duplicated invoices, improperly classified freight, and incorrectly billed accessorial charges, small mistakes can rapidly add up to steep costs when they go unnoticed.

Look at it this way: even if only one in every hundred invoices contains an error and only one error in every ten goes undetected, that still amounts to extra dollars being subtracted unnecessarily from the bottom line.

Minimize errors by making the manual audit a thing of the past

These days, manual auditing just isn’t necessary. Modern freight audit technology can not only review thousands of freight invoices in a fraction of the time it would take a person but can catch countless errors that the human eye might gloss over.

Since digital solutions also automate the data capture process, gaining a complete and accurate picture of global freight spend is significantly easier. This allows shippers to perform regular freight spend analyses, establish baselines, and make smarter, data-driven decisions moving forward. When staff are entering the data required to perform this kind of analysis manually, there’s a high chance that a number will be entered incorrectly or vital details will be left incomplete, which can skew the results and lower the quality of insights extracted from the data.

Get your freight audit right, every time.

CTSI-Global’s world-class multi-modal freight audit solution makes it easy to manage spend, handle accrual reporting, and put money back in the bottom line. Our solution automatically audits all freight invoices—both domestic and international, and across all modes and carriers—and processes refunds for exceptions in a timely fashion. And since we develop our tools ourselves, we’re able to accommodate a wide variety of custom coding requirements and allocate costs by any criteria.

Getting the freight audit process wrong can be costly. Ensure you’re never paying more than you need to by contacting us today.

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