You will be amazed to know that 20% of all freight bills have errors, and some of them lead to overcharges of around 5-15% per invoice. Poorly tracked freight bills can quickly increase the bills and unnecessary expenses. Hence, freight audit acts as a crucial tool for businesses to reduce costs. 

But all audits are not the same. Businesses frequently choose between pre-audits and post-audits to manage the freight bills. Though each audit has unique steps, advantages, and disadvantages, these two types of audits aim to ensure error-free billing. 

Let’s understand and analyze freight audit services, both pre-audits and post-audits, to help you decide which approach can result in long-term savings. 

What Are Freight Audits?

The process of confirming and validating freight bills that carriers generate to ensure billing accuracy is known as a freight audit. Overcharges, duplicate charges, inaccurate weight classifications, accessorial charges, and other discrepancies are among the issues that these audits help identify. Freight audits ensure you pay the right amount by keeping a check on the billing mistakes, overcharges, or duplicate charges. Freight audit services offer financial transparency in logistics operations and protect businesses from unnecessary expenses. 

Freight audits are typically divided into two categories:

• Pre-Audit 
• Post-Audit

Both have different methods and implications. Let’s explore them.

What is a pre-audit of a freight bill?

A pre-audit of the freight bill is done before the carrier is paid. In this process, the freight invoice is studied and confirmed against the terms of the contract, shipping information, and agreements. With pre-audit of the freight bills, you can save money, ensure that the contracts are followed, and verify correct taxes. 

Key Features of Pre-Audit:

• Cost Verification Before Payment.
• Immediate Cost Savings.
• Rate Compliance.
• Reduced Risk.

This method is helpful to businesses that handle a large number of shipments and want to regulate each freight payment. 

What is a post-audit of a freight bill?

The post-audit of freight is conducted after payment to confirm whether you have been overcharged or overbilled. It involves the establishment of recurring feeds of electronic invoices, lading bills, contracts, and payment details to perform a review.

Key Features of Post-Audit:

• Identifies overcharges & duplicate billing
• Check of invoices, contracts, & tariffs
• Files and manages claims to recover overpayments
• Finds opportunities for savings
•  Improves long-term freight management

This method benefits all kinds of businesses with significant freight, shipping costs, or logistics. Even minor billing errors can cost large amounts. 

Freight Bill Pre Audit vs Freight Bill Post Audit

Parameters	Pre Audit	Post- Audit
Timing	Conducted before payment of bills.	Conducted after payment, usually a few months later.
Scope	Limited to a specific set of bills.	Analyse all payments through ongoing feeds.
Insight Provided	Only checks bills before payment.	Provides a comprehensive view of billing.
Error Detection	Detect billing errors before paying.	Find hidden or ongoing errors missed in pre-audit
Business Impact	Prevents incorrect charges, but doesn’t show the full picture.	Helps avoid large, ongoing, and significant losses.
Best Practice	Should be paired with a post-audit for a complete picture.	Integral to long-term cost recovery and billing accuracy.

Which is better for your Savings?

Depending on your business’s logistics plan:

• Businesses that focus on cost control from the beginning should use Pre-Audit. 
• Post-Audit is a stepping stone to resolving past inconsistencies and crafting plans. 

Best Practice: Any logistics and transportation department will certainly have many moving components and be complex! This makes it simple to experience overcharging and billing problems. It’s critical to realise that these mistakes are frequently the consequence of human error. Regretfully, these mistakes cannot be fully captured by a pre-audit of the freight bill unless you do a post-audit as well. Because if these issues are not identified and fixed, they may persist for a long time and have an unfavourable effect on your profitability. Pre-audits, on the other hand, stop overpayments beforehand, safeguarding your business’s cash flow and lessening the administrative strain of subsequent fund recovery.

This is where comprehensive freight audit services become important. The Computyne team has put in place a mechanism that can promptly identify mistakes and recover funds that are due to your company.  A smart combination of both Pre and Post-Audits offers holistic protection, effective cost saving, and long-term benefits. 

(CTA) Computyne offers reliable outsourcing of Freight Audit Services. The team is dedicated to assisting companies related to different niches in achieving operational effectiveness and financial solutions. 

Freight bills audit and payment play a crucial role in the world of logistics. Freight billing is a complicated task, and the chances of errors are high. The global freight transportation market was valued at $10 trillion in 2022 (≈7% of global GDP) and is projected to grow to $15.5 trillion by 2027; with such trade volumes, companies cannot afford even minor errors in freight billing. Hence, Freight audit services act as a helping hand to businesses around the globe. The freight audit process not only catches errors but also contributes to major improvements in the overall cost savings. 

The Importance of Freight Audit and Payment

The core of freight audit is the verification of bills to make sure they are accurate. From keeping a check on overcharges and billing mistakes, it also includes the payments to the carriers. Some of the commonly found errors in invoices;

• Wrong Carrier Name and Number
• Incomplete Contact Information
• Incorrect Discount Rates
• Wrong Calculations of Weight & Dimensions

With a significant number of invoices and complex freight rates, it becomes an extraordinary task to keep the bills free of mistakes. Hence, freight audit services are essential for avoiding duplicate payments and improving transparency in logistics. The difficulty here is: Should businesses handle freight audits in-house or outsource freight audit services? Let’s explore and compare both methods. 

In-House Freight Audit Services

In-house freight audit services indicate that the company manages freight invoices internally with the assistance of a specialised logistics team. This method provides the businesses with greater control and checks. It offers a direct insight into the audit results. In-house freight audit services can be customized to focus on recurring issues.

Pros of In-house freight audit services;

• Better control and visibility
• Tailored to business needs
• Stronger & direct relationships with the carriers

 Cons of In-house freight audit services;

• Requires substantial manpower and dedicated expertise
• Huge setup and maintenance costs for Freight audit software
• Long-term expenses due to continuous updates
• Unnoticed mistakes can impact profitability

Outsource Freight Audit Services

Outsourcing Freight Audit means assigning this task to a third-party company having a team of freight experts. All the bills, invoices, and shipment details are forwarded to the third-party that verifies this data and reduces the possibilities of billing errors. Outsourcing freight audit services offers complex freight and bill audits in less time than an in-house freight audit. 

Pros of Outsourcing Freight Audit Services;

• Offers profound freight audit knowledge
• Detects unseen billing errors and overcharges
• Access to advanced technology for faster & precise audits
• Recovers overpayments and cuts unnecessary costs
• Liberates in-house teams to focus on core business tasks
• Up-to-Date Practices aligned with the latest industry standards

Cons of Outsourcing Freight Audit Services;

• Less Control reduces direct oversight of auditing
• Providers may miss business specific needs
• Outsourcing fees can be high for complex freight
• Sharing sensitive information arise security concerns
• Communication gap can slow down the whole process

A Clear Comparison

Factors	In-House	Outsourced
Control	Direct control with oversight of audits	Less direct control
Customization	Designed to specific business needs	Standardized processes, may miss unique requirements
Expertise	Requires in-house logistics team	Access to specialists with best audit knowledge
Technology	Requires investment in freight audit software	Use of advanced technology without client investment
Cost	High setup and long-term expenses	Cost can be high, but potential savings from error recovery
Error Detection	Risk of unseen mistakes that affect profitability	High accuracy in finding errors and overcharges
Focus	In-house professionals spend time on audits instead of focusing on growth	Frees in-house staff to focus on core business activities

Why experts suggest outsource freight audit services? 

• Companies with higher invoice volume & complex freight mostly hire outsource services. 
• Businesses with internal staff having limited knowledge about global freight audits favours outsourcing. 
• Outsourcing freight audit services offer long term cost savings. 
• Outsourcing offers less errors, efficient process, and fast outcomes. 
• In-house resources can be used to focus on core businesses activities. 

The decision of choosing in-house or outsource freight audit services depends on the company’s unique needs, present situation, future plans, and strategic direction. The focus should be on reduction of cost, accuracy, business efficiency, and error free billing. It is essential to conduct an in-house analysis to have an understanding of recurring issues and requirements before making a decision. Remember, the goal is not just to cut freight costs but to improve overall operations for long term.

(CTA) Computyne specializes in providing inclusive Freight Audit services that restructure your logistics operations. We are equipped with advanced technology and indepth knowledge of the industry to point out billing errors. Our experts can provide you with accurate payments and reveal cost-saving techniques. Let us handle the complex freight audits so that you can focus on taking your business to the new heights.