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Freight Invoice Auditing for The Modern Manufacturer

Freight Audit

Ask any manufacturer for a mythical Christmas present and they will likely ask for a time machine. Whether it’s to go back to change a previous mistake, or to simply slow down things to permit them to catch up, time management is usually at the heart of all manufacturing related issues. It’s due to this fact that many manufacturers large and small trust an experienced 3PL or third-party logistics company to handle their supply chain functions – especially the freight invoice auditing task.

Every day across the US, manufacturers, retailers and anyone
who ships products to customers are billed incorrectly for services rendered. From
inflated mileage charges to being billed incorrectly for fuel surcharges and
more, mistakes on freight invoices cost companies thousands of dollars each
year. However, proactive thinking manufacturers are beginning to see the value
of entrusting this vital business operation to experts in logistics, who not
only look after their best financial interest, but can make changes to their
supply chain management and processes for improved efficiency, customer
service, and bottom line profits.

In the next few paragraphs, we’ll outline a few of the reasons
why today’s time-strapped manufacturers from independently owned to Fortune 500
giants trust 3PL’s to complete freight invoice auditing on their behalf.

Why is Freight Invoice
Auditing Important for a Manufacturer?

You’ve probably heard of the expression “stay in your lane”
in respect to management. This phrase is typically linked to taking on tasks
that fall into your area of responsibility or comfort level. Those who operate
or manage manufacturing businesses have multiple tasks to deal with including
daily production schedules, supply management, people issues, payroll, insurance,
billing and more. Due to these facts, several manufacturing companies simply
don’t have time to review their freight invoices – or just assume everything is
on the “up and up” with their vendors.

Guess what – shipping carriers know this reality too – and tend to take advantage of the opportunity to inflate their invoices without your knowledge. Now, we’re not saying that all carriers are manipulative, evil organizations, but some are not as ethical as others – or simply make more mistakes that tend to benefit themselves.  

Experienced freight auditing companies are hired by manufacturers,
retailers, and other shippers to help them review invoices for clerical or human
errors. Auditing a freight invoice typically involves reviewing data entry on
the specific carriers shipping terms, the services rendered, recipient
information, proof of delivery, and more. This detailed task reviews every fine-detail,
every charge, and documentation noted.

What are the Common Invoice
Mistakes Found by 3PL’s?

Most of the time, freight invoice errors are simply human or
clerical mistakes that are not done on purpose. However, since most
manufacturers assume that their freight charges are non-controllable expenses,
they simply pay them without digging into the details. Some of the most common
mistakes found on freight invoices of manufacturing companies may include, but
are not limited to the following:

While each of these examples are generalizations, the truth
is that each one has multiple possible error points that can be discovered by a
professional 3PL. An experienced freight invoice auditing company will have the
resources, experience, relationships, and a proven process for reviewing
invoices, locating hidden errors, correcting them, and can in many cases submit
the payment for you. 3PL’s are that magic time machine that can free you up to
focus on other day-to-day manufacturing operations.