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When businesses fail to audit their invoices properly, they pay multiple times for the same invoice, resulting in huge revenue losses.
Fremont, CA: All this data must be audited by companies to better manage freight, including errors in freight billing, duplicate payments, and complex tax rules from different countries. Several businesses find freight audits confusing and difficult to comprehend. All the relevant data can be pooled by an expert who can audit the freight bills. Shippers face challenges during the freight audit process, as discussed in this article.
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The six common challenges faced by shippers during the freight audit process:
Freight invoice auditing is not a solution for the root cause of freight billing errors. As part of auditing, billing errors must be disputed with the carrier, freight disputes must be tracked, and transportation carriers must be requested to correct their invoices. The following are six challenges shippers face and their solutions.
Duplicate invoicing
There are thousands of duplicate freight invoices that are issued by shipping carriers every year, especially to companies dealing with large volumes of shipping. When businesses fail to audit their invoices properly, they pay multiple times for the same invoice, resulting in huge revenue losses.
Discrepancies in freight rates
When calculating freight prices, some companies use old freight rates, which fluctuate constantly. Shippers and companies are left in a state of confusion and dispute as a result. Invoice and quote inconsistencies are often caused by freight rate discrepancies.
Incorrect freight classification
Shipments must be classified by freight (NFMC) in order to calculate shipping charges. There are 18 freight subclasses based on density, size, stowage, and liability specifications. When shippers select the incorrect NFMC code to calculate freight charges, it will cost them.
Shipping discounts
It is common for shipping companies to offer discounts to their regular customers. Freight shipping discounts can be negotiated by shippers with shipping carriers. If contracts are not updated regularly, shippers may lose out on shipping discounts if they do not negotiate with shipping carriers often.
Tax and Tariffs
To calculate freight charges, you need to apply state, federal, and international taxes. The whole shipment will be affected by the wrong taxes or customs duties. The absence of taxes on invoices will also result in shipments being delayed, wasting time and money.
Accessorial fees
Accessorial fees or surcharges influence the cost of freight shipping. Fuel surcharges, terminal handling surcharges, emergency bunker surcharges, peak season surcharges, etc., must all be correctly recorded and accounted for. If surcharges are applied incorrectly, incorrect invoices will result and will need to be disputed with the carrier.
It is vital for freight shippers to find a quick solution to these challenges. Exceptions and vouchers are handled by teams responsible for the manual freight audit process. Human error can also occur as a result of overworked audit teams. Therefore, digital solutions are essential for optimizing shipping processes.
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