When was the last time you went through your carrier invoice line by line? This could be any kind of carrier invoicing, like a freight bill or parcel invoice. Whether you ship infrequently or are a high-volume shipper, carrier charges are a big part of the logistics and freight cost. If you’re not monitoring the carrier billing statement with a freight audit software, there is a chance you are submitting an overpayment of logistic and shipping services. Spending more money on a UPS late payment fee, for example, is money that could be used in other useful places.
The auditing process can reveal billing errors when you go through each invoice line. The audit involves looking at the following items individually:
- Delivery address
- Freight cost
- Deductions for discounts
- Delivery guarantees
- Any issues specific to you as a customer
The carrier bill should align your business rules, which is easier to do if you’re using automated software for the audit. Using both shipping software and transportation management software can help drill down to the individual shipment level, providing a greater level of transparency into the specifics of a freight invoice.
This can be done manually, but it’s more time-consuming and challenging to prioritize all of the business rules needed to be upheld. It’s also more prone to errors, as it is hard for humans to find every mistake, especially when the shipment invoice can be so complicated. Software is available to help with the freight audit process, or the work can be outsourced to a different freight payment audit firm.
The other part of a carrier invoice reconciliation is checking the general ledger to ensure the payment information is correct. You should double-check the invoice number in the company general ledger to make sure it doesn’t show you already made the payment, if you are preparing the bill for payment. If the invoicing statement was already paid, the audit should ensure that you haven’t overpaid it.
Though not a carrier invoice, it’s a good idea once or twice a year to perform a benefits reconciliation. This audit looks at employee benefits provided by insurance carriers, to ensure that your company is only paying what it’s supposed to. You’ll want your HR team to be intimately involved in the premium reconciliation process, as the HR team will have the best understanding of the payroll system and employee enrollment in the programs.
Bills within a payroll system usually give details regarding:
- Information on the employee premiums
- Employer contributions
- Agent’s commission
- Information about individuals apart of the employee benefit programs
This should be cross-referenced with your own HR information, including the payroll deduction information, and to make sure you don’t have a terminated employee still receiving benefits.
Mistakes will often be found during your carrier invoice reconciliation process due to errors made by the shipping vendor, which means you could find errors on a benefits reconciliation as well. Likely, it is not fraud, but mistakes can happen easily. They can cost your company revenue, and any money you’re paying a vendor for unused services is revenue you have to work even harder to earn.
Parcel Pay and Invoice Audit Recovery Programs
Fortunately, you don’t have to do a carrier invoice reconciliation yourself. There is help available to monitor and pay freight invoices. Third-party companies, like Shipware, offer this expertise. Outsourcing to a third-party company is a cost-saving measure for companies that don’t have time to hire or pay staff to perform this work. By outsourcing it, it’s done quickly and accurately by experts who make this the focus of their work.
Shipware’s invoice audit recovery program typically saves clients 1% to 9% of their total invoices. Any eligible refund is claimed automatically and put directly into the client’s account. The shipper doesn’t have to do anything, and the service costs nothing out-of-pocket. The invoices are uploaded to Shipware’s system through a quick and easy connection. The audits occur in the background, and Shipware follows up on any eligible refund amounts. Shipware only collects payment if your company recovers money from carrier mistakes.
Many companies like to combine the invoice auditing with a parcel pay program, as paying these carrier invoices can be confusing and frustrating. With multiple carriers and multiple invoices, there is a lot to track, especially if it’s not someone’s full-time job. There are varying due dates, and invoices can change when information is updated. That’s why using a third-party service like Shipware’s parcel pay program is a popular solution. Your company’s accounts payable department can focus on their other invoices and leave the difficult ones to us.
To learn more about invoice audit recovery and parcel pay, with no obligation, contact us online.