Freight Auditing has many different meanings in the transportation industry, so this is only a brief description of what freight auditing can be.
For large freight shipping companies, managing the invoicing and payment accounting processes is a daunting task.
One of the primary reasons for the complexity of billing in the freight shipping industry is that there is an enormous number of freight carriers who all run their businesses without standardization in the rating or the billing process. In the full truckload market alone, there are over 10,000 separate freight trucking companies that provide services to the freight shipping market.
Therefore, freight auditing companies have years of experience in working with transportation providers and freight carriers, and they can better automate and assimilate the carrier’s freight invoicing and payment process to accomplish the task at a much lower cost and with better supply chain optimization results.
Freight auditing software has been created to automate the most receptive tasks associated with the entire matching and recovery process:
- The first step in the freight auditing process is to digitize all shipping data into a computer database so that the computer can manage the data in a much faster manner than the use of paper invoices. The conversion of paper information to data or scanned images will then best serve the freight auditing through the entire process. Freight audit companies are experienced in working with carriers to transmit invoices through a common method usually known as Electronic Data Interchange (EDI), which has been around for 30 years.
- Once the processing starts, the auditing software will separate all of the discrepancies from the matching process and categorize them into sub-classes that can be sorted and converted into actionable processes needed to resolve the invoicing error.
- Resolution will now need the manual assistance of an experienced invoice auditor, which is outside of the logic of the computer. This is the important value that is achieved by using the freight auditor to supplement the company’s accounting process.
- Once the dispute process is complete, the invoices that are due for payment are presented to the shipper for final approval to be paid by them, or to have the freight auditor pay on behalf of the shipper. The freight payment process by the auditor is usually more cost effective than doing the payment in-house, because the shipper can pay hundreds of invoices with a single electronic payment.
The result of this process reduces the per-invoice processing cost and improves the recovery of disputes and claims.
ClearView is a leader in freight audit and payment software and services with web based portals for real-time and accurate assessment of the current state of the customer’s shipping data and freight auditing.