An estimated 25% of freight invoices have some errors on them, which can dramatically impact a company’s profitability. For that reason, it’s very important that someone comb through your freight invoices manually, but it can be an exhausting task. When checking freight invoicing, there are a number of things that must be checked from the shipment weight, through to the mileage, carrier information, shipping details, price, tracking info and any relevant discounts. There are also often taxation costs that must be checked and verified to be accurate. Many companies prefer to work with a freight audit company like CT Global Freight Audit because they have the expertise to quickly comb through freight invoices to find any errors. Often what you spend in auditing services, will be saved many times over in corrected invoices. If you’re interested in learning more about what kind of errors are found on freight invoices, keep reading to learn more:
1. Shipper Inaccuracy
This occurs when the shipper gives incorrect shipping information. You may place an order and be told that the total weight of the product will cost $1000 to ship, but the shipper has calculated the weight wrong and it actually weights three times as much as they said. This means that the shipping costs would total $3000 (three times as much) and can result in unexpected costs for the buyer. At this price point, it may have been more affordable to purchase the product locally or from another supplier. Which company bears the cost of this discrepancy will depend on the specific buyer/seller contract, but if it is the shipper then they will be operating at a higher than expected loss.
2. Penalty Charges
There are a few situations where there are penalty charges in the shipping industry. Usually there will be specific time frames when shipments can be collected and for everything to run smoothly these hours must be respected. If you’re shipment is available during a 12-2pm time slot, and you arrive 4 hours late to collect it, then can be a per hour penalty charge for ‘detention fees.’ Likewise, you could be charged these penalty fees accidentally if the shipment was not ready when advised and it could be accidentally added to your invoice. There could be also some errors within the detention fees, such as charging you more hours than actually observed and so forth. It’s important to make sure any penalty charges are accurate and relevant for your case.
3. Extra Charges
There are a number of extra charges you may see on your bill, that could be relevant or not. Additional tasks such as residential collection, inside delivery and re-consignment could show up on your invoice as additional charges. You’ll want to verify that any of these things that you’re billed for were services that you used, and that their rate matches any previously agreed rate. Sometimes things are accidentally added to invoices so it is important to screen for errors to ensure you’re not paying for services your company did not receive.
There are a number of ways invoicing errors can manifest within the shipping industry. Working with professionals who can quickly isolate and analyse potential errors can save you thousands of dollars per shipment.
What is a Freight Audit Company and What Do They Do
