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The Importance of Freight Pay and Auditing In Cost Management

As you sit at your desk examining a freight invoice, a question might cross your mind: Is this bill completely accurate? It’s a typical concern in business, where every expense matters. 


Now, you might assume that freight invoices are always correct, giving you the confidence to approve payments without hesitation.  


However, it's a surprising fact that a significant number of these bills – estimates suggest between 10-25% – have errors. These accidental or deliberate inaccuracies can sneakily increase your freight expenses, affecting your company's profits.  


The key to addressing these challenges is effective freight pay and auditing services. This guide will explain how these services can be beneficial for your business, especially in protecting your profits and helping to clarify your freight expenses. 

What Is a Freight Audit?

A freight audit is a vital business process where your company's freight bills are carefully reviewed for accuracy.

The process begins with a thorough check of your invoices. An 8-point system is usually employed here. It is designed to catch any discrepancies or errors while focusing on crucial aspects such as, shipper information, carrier details, mileage covered, shipment weight, and the overall price.

An additional step involves verifying that each invoice is unique. This is crucial in preventing duplicate payments, a common pitfall in freight billing. 


If errors are detected, your chosen Freight Audit and Payment Services take an active role. They don't just identify these discrepancies; they directly engage with the carrier to rectify them so that a revised and accurate invoice is issued. 

benefits of freight pay and auditing

What Is a Freight Pay?

Freight Pay is another integral component of your business's financial operations, specifically tailored for managing the payment of transportation invoices. It's a specialized accounts payable service, designed to handle the unique requirements of freight billing efficiently. 


For you, this process may involve having your logistics or transportation manager gather all the carrier invoices and then assigning your accounting team to handle the payment of each invoice, either through a direct clearing house or by issuing individual checks. 

How Does Freight Audit & Pay Save You Money?

As a business owner or manager handling shipments, understanding the financial benefits of freight pay and auditing can profoundly affect your cost management strategy. They not only streamline your shipping processes but also significantly reduce your expenses.

Let's explore how this system directly impacts your bottom line.

freight auditing and payment benefits

1. It identifies issues early. 

Freight bills can be tricky, and small billing mistakes can turn into big problems if not caught early. For instance, a slight mix-up in extra charges for late pickups can become a big financial issue over time.  


Freight audits help you find these mistakes quickly. They make sure you and your carrier understand each other, preventing small errors from turning into bigger disputes.  


If you notice a carrier often makes mistakes, you can decide whether to keep working with them.

Moreover, regular audits can also reveal if a particular carrier frequently overbills, giving you valuable insight for future business decisions.

2. It saves you time. 

Using a freight auditing company can make a big difference in how your team spends their time.  


By taking over the detailed work of checking and sorting through invoices, these auditors free up your staff. This means your team can stop wading through piles of paperwork and start focusing on things that matter more, like giving better service to your customers or honing their management skills.  


This switch not only makes your business run more efficiently but also helps you keep a stronger focus on your customers.

3. It reduces your expenses. 

At the core of freight pay and auditing is its ability to identify and correct costly errors. Even with careful management, overcharges and errors in weight calculations are common in freight billing.

These can range from simple overcharges, like being billed $100 instead of the negotiated $50, to more complex issues, like incorrect weight charges, like being billed for 650 pounds when your product weighs 500 pounds. These minor differences, when added up in the long run, can turn into huge financial losses.


Consider this scenario: your business handles 200 deliveries per day, translating to around 6,000 deliveries monthly. If just 3% of these deliveries contain billing errors, that's 180 deliveries potentially overcharged. At an average error cost of $20 per delivery, this could mean an additional $3,600 in unnecessary expenses each month.


By implementing freight audits, you can detect and rectify these errors, protecting your business from such avoidable costs.

 freight audit for cost management

Turn to Premier Logistics for Billing Accuracy and Streamlined Operations

Freight audit is essential for businesses relying on shipping to transport goods. However, many companies fail to audit their freight bills, resulting in substantial revenue loss and unnecessary strain on their operations. 


It’s time to stop letting billing errors and operational inefficiencies hold back your business. Choose Ship Premier Logistics for top-notch freight pay and auditing services.  


Our expertise extends beyond handling current invoices. We can legally review up to six months of your past invoices, carefully identifying any mistakes or oversights. Additionally, our services streamline your accounting processes, freeing your team to concentrate on other more important tasks. 


Request a quote from us today and take the first step towards smarter, more efficient freight bill management.

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