Cost optimisation and profit margin increase have become, now more than ever, the number one priorities for companies of all industries and sizes. Reducing costs, however, is not as straightforward as it may look at first glance.
Why? It's not always easy to understand and decipher invoices, especially regarding carrier invoices and logistics documents.
That's when Parcel Auditing comes into play. Read our guide, discover what is a parcel audit, how to perform one, and what benefits it can bring to your company.
Parcel auditing is the process of analysing shipping invoices and carrier contracts to identify billing errors, surcharges, and other discrepancies. It is an essential practice for companies that rely heavily on parcel shipping to ensure they're paying the correct amount for their shipments.
The need for parcel auditing arises for several reasons. These are the main ones:
Parcel audit services meticulously scrutinise shipping invoices, identifying any errors, duplicate charges, or overcharges. By reclaiming funds for inaccuracies and negotiating better rates with carriers, enterprises can significantly reduce shipping costs, and enhance overall cost management strategies.
Parcel audits ensure compliance with contractual agreements and industry regulations, minimizing the risk of penalties and legal issues. By holding carriers accountable for adherence to service level agreements (SLAs) and billing accuracy, enterprises can maintain a high level of trust and integrity in their supply chain operations.
Parcel auditing generates actionable insights through advanced analytics and reporting capabilities. By analysing performance metrics, and cost-saving opportunities, enterprises can identify optimisation opportunities, negotiate favorable contracts, and drive continuous improvement initiatives across their supply chain ecosystem.
Parcel audit solutions offer comprehensive visibility into shipping processes, providing detailed insights into carrier performances. This transparency empowers enterprises to optimise logistics operations, mitigate risks, and choose the best logistics partners for their needs.
If conducted manually, freight invoice analysis can take up a lot of time. But if you were to do it without any tool, here are the steps you should follow:
Keep your carrier contract at hand every step of the way while performing manual parcel auditing. It will help you identify surcharges faster.
After the audit is completed, you have to reach out to your logistics partners to resolve identified issues and negotiate favourable terms.
Lastly, implementing improved processes and controls to prevent future billing errors is a must-have to ensure the sustainability of future parcel audits.
What should you look for? Here are 7 common issues that can cause extra logistics costs for your company:
While parcel auditing offers numerous benefits, businesses may encounter issues along the way. Some common challenges include:
That's why enterprise companies invest in automation and choose parcel audit softwares to analyse carrier invoices.
These systems leverage machine learning and AI to go through huge databases to match contract deals and invoice data. The output thoroughly analyses logistics costs and surcharges that can be avoided or renegotiated.
Many benefits come from leveraging automated parcel auditing.
Cost optimisation and profit margin enhancement remain top priorities for enterprises across industries. Parcel auditing emerges as a critical solution, enabling companies to identify billing errors, surcharges, and discrepancies in shipping invoices and carrier contracts.
By streamlining operations, reducing internal costs, and leveraging automation, parcel audit software empowers enterprises to drive efficiency, optimise logistics costs, and enhance profitability in their supply chain management.
Embracing advanced technologies like machine learning and AI, companies can navigate the complexities of logistics invoicing with confidence, driving sustainable cost savings and operational excellence.