Freight bill audit software is a common term in the transportation industry that has several meanings which can usually be distilled down to a few decisive definitions:
- The auditing of invoices that are issued to shippers from the freight carriers that are used to move hard goods is a process that is common in any accounting function within companies that use multiple modes of transportation in some complexity.
- The reconciliation of carrier invoices is comprised of the knowing the original agreement pricing compared to the carrier invoice or request for payment for that service. This is commonly known as invoice matching and is relatively common.
- Freight auditing is the process that is accomplished after the matching process is complete. If the invoice does not match the original intended cost, then the process will continue to define the reason and the effort needed to settle the dispute between the shipper and the carrier.
- The shipper dispute of incorrect invoice is the heart of the freight audit process that requires additional tools and expertise to come to resolution. Common reasons are incorrect calculations, errors, added unwanted services, damages to goods, poor performance, and others.
- Shippers commonly use outside companies of freight audit software and services to achieve the highest possible return on the auditing efforts. It is usually not sufficient to just use the invoice matching function but to also utilize transportation expertise to discern the deepest meaning of the discrepancies.
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 process is to digitize all 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 auditing through the entire process. 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 software will separate all of the discrepancies from the matching process and categorize them into subclasses that can be sorted and converted into actionable processes needed to resolve the error.
- Resolution will now need the manual assistance of an experienced auditor is some cases that are 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 payment process by the freight 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 freight auditing.