Every dollar that is wrongly paid to a carrier drains resources away from your business. By using parcel auditing, you can identify and recover eligible refunds.
Manual parcel auditing requires a significant amount of time and parcel pricing knowledge to identify errors. For this reason, many logistic companies choose to outsource their carrier invoice auditing to a third party. For professional help, contact Mindful Logistics LLC.
Small parcel audit is an important step for businesses aiming to cut shipping costs, comply with contract terms and achieve business goals. The process involves reviewing invoices and shipping manifest feeds, checking for errors, and recovering refunds. Whether performed manually or through parcel audit software, this type of audit can help businesses save thousands each year.
Carrier invoices contain a wealth of data, ranging from delivery dates to package sizes and dimensional weights. However, it can be challenging to identify and correct invoice errors. This is why it’s essential to perform a small parcel audit regularly. In addition to catching overcharges, the audit can reveal trends and cost-saving opportunities.
The most common shipping carrier invoice errors include extra charges, incorrect service guarantees, and late fees. These errors can add up to significant expenses for a company, especially when they aren’t caught in time to request a refund.
While a business could try to audit their carrier invoices in-house, this is often costly, time-consuming, and interrupts daily workflows. In addition, it can be difficult to find all of the errors because of the number of documents and data that must be analyzed.
A better option is to use a parcel audit software solution, such as Zero Down. This software automates the auditing process and checks invoices against a company’s shipping data, identifying errors in real-time. This not only saves time, but also enhances accuracy by catching even the most hidden errors.
There are three types of small parcel audits: manual, software, and services. A manual audit is typically done by an employee, who must go line by line through carrier invoices to identify errors. This type of audit is expensive, time-consuming, and requires a great deal of effort to find all of the errors.
A better alternative is to use a third-party service provider, such as Lojistic, which offers an affordable monthly subscription with an ongoing parcel audit that helps recover refunds for invalid charges. The service provider can also advise on the best strategies for reducing shipping costs, including optimizing shipping methods and processes.
Reviewing Invoices and Shipping Manifest Feeds
Invoices and shipping manifest feeds are two of the most important data sources for Small Parcel Audit. When combined, these provide valuable insight into your parcel shipping expenses and help you identify billing errors that could be costing your business money. Whether these errors are the result of incorrect weight or shipment classification, surcharges that aren’t applicable, or overpayment due to miscalculated rates, you need to have accurate data in order to take action and reduce your shipping costs.
Using an automated parcel auditing solution to collect this data eliminates the need for dedicated staff and manual process, saving you time and resources. It also ensures that all shipping data is consistently analyzed and provides solutions that keep your business financially healthy.
In addition to checking that all charges on a carrier invoice match the terms agreed upon in your contract, an automated process can also verify discounts and ensure that all fees like transportation, fuel surcharges, accessorials, and special handling are accurate. Additionally, this kind of audit can catch errors like late delivery charges that impede your ability to meet promised shipment service levels, address correction charges that aren’t warranted, or Saturday charges that aren’t allowed under the contracted rate.
When you catch these kinds of errors, you can recover refunds from your carrier and improve the efficiency of your parcel shipping operations. The best way to perform these audits is by leveraging software that can automatically collect data from multiple document types like EDI, email, and carrier portals. This data can then be consolidated into a single platform for analysis.
Once this is complete, the software can detect the types of errors that occur on a regular basis and provide solutions that prevent these mistakes from happening again in the future. These could include overcharges, inaccurate dimensional weight assessments, duplicate billings, and other mistakes that are common among shipping carriers.
Regardless of the size of your business, implementing a systematic process to monitor your shipping costs is crucial for sustainable growth. While it may be tempting to put off establishing this type of system, leaving these errors unchecked can add up quickly and drain your budget. By implementing an automated auditing system, you can maintain high standards of customer satisfaction and grow revenue through consistent service quality.
Performing Data-Driven Auditing
Performing a detailed parcel audit is an important step in shipping cost optimization. It helps identify overcharges and wrong rates, improving invoice visibility and reducing risk. Additionally, it helps you save money by finding opportunities to negotiate with carriers for more favorable rates or even reduce your overall logistics spend.
To make the most of your small parcel audit, you should consider outsourcing the process to a third-party provider. This will give you access to sophisticated tools and deep insights that can uncover savings opportunities faster than in-house methods. The right third-party provider should also be able to help you navigate changing market conditions, renegotiate carrier contracts, and develop shipping strategies that reflect your business needs.
In addition to identifying overcharges and errors in rate structure, a comprehensive small parcel audit can reveal additional surcharges that may be applied to your invoices. For example, a shipping carrier may charge extra for a shipment going to a remote location. An independent auditor can verify if the delivery area service (DAS) is correct and request refunds for discrepancies.
Shipping costs can add up quickly, especially for small parcel shipments. By conducting a thorough small parcel audit and proactively seeking out ways to improve your pricing structure, you can keep your shipping costs under control and retain customers.
A home furnishings e-commerce company was facing rising small parcel shipping costs that were eating into profits and creating customer dissatisfaction. They approached Zero Down Supply Chain Solutions for a full logistics analysis. Our team analyzed their invoices, shipping manifests, and carrier contracts to find opportunities for savings. We helped them implement a Parcel Audit program, conduct Contract Optimization, and automate their invoices with SAP uploads. We were able to recover over $300,000 in small parcel refunds that they were not previously claiming.
Automation is a key component of effective logistics management. Using technology like AI and anomaly detection, tedious data collection becomes a seamless process. It’s like having a high-tech logistics sidekick that tirelessly collects, analyzes, and presents data in real time to make informed decisions for your company.
Performing Detailed Auditing
Using specialized software programs to audit carrier invoices provides an accurate picture of parcel shipping expenses. It can also catch errors that may have gone unnoticed in manual processes. This can save businesses significant money and improve their bottom lines.
Carrier invoices can contain mistakes for a variety of reasons, including mis-entered shipping data or human error. Performing small parcel freight audits can help ensure that businesses only pay for what they actually shipped, and get refunds for shipments that are delivered late.
A comprehensive audit can analyze several aspects of a company’s shipping operations, including volumetric weight and fuel surcharges. It can also analyze the rate calculation process and verify if the company is paying the correct shipping rate. It can even find inaccuracies in billing practices, such as when a package is billed for more than its actual weight.
There are three main types of small parcel audits: manual audits, automated invoice auditing, and third party audit services. Manual audits can be time-consuming and expensive, but they are a good way to identify shipping expenses that need to be reduced. Automated invoice auditing is a cost-effective and reliable solution, and it can save businesses money by identifying potential mistakes and errors.
Third party small parcel auditing services are a great option for businesses that do not have the time or resources to perform in-house freight audits. These companies can help to reduce shipping costs by identifying a wide range of inaccuracies and claiming refunds for those expenses. They can also evaluate shipping carrier rate structures and determine the best way to negotiate rates.
Shippers need to balance providing customer service with managing their shipping costs and meeting business goals. Developing and implementing an effective freight audit process helps them stay competitive in the ever-changing business landscape. A thorough small parcel freight audit can provide shippers with a significant savings and an edge over their competitors. By catching billing errors, whether they are caused by human slip-ups or carrier mistakes, businesses can ensure that they only pay what they should for their parcel shipments.