Small, ongoing errors snowball, wreak havoc on your operations and cause detrimental losses in your earnings. For the sake of the long-term health and sustainability of your organization, it is critical to keep data discrepancies in your back office to an absolute minimum. By simply auditing your accounts payable (AP) and accounts receivable (AR) documents, you’ll be able to identify problems at their point of origin, mitigate the potentially crippling miscalculations from bleeding into other areas of your business and maintain your company's reputation as a preferred service provider.
Many carriers and 3PLs still find that their in-house auditing process is less than efficient, especially as they begin to expand or brace themselves for market volatility spurred by external forces (such as the current trade war between US and China). Before you know it, the headache of managing rate audits grow to outweigh the reward, and the practice becomes deprioritized, marginalized and all too often, omitted from an operation entirely.
Here's Why Writing Off Rate Audits is a Rookie Mistake.
When this happens, an entire ecosystem feels the repercussions, but it always hits hardest at home. Inaccurate data produces a domino effect of harmful consequences that most noticeably impact your company’s bottom line.
For example, the wrong data on a freight bill can lead to:
- Incorrect charges
- Misguided deliveries
- Duplicate payments
- Delayed payment
- Unhappy customers
- And ultimately: A cutoff of cashflow
It’s a Numbers Game. Play to Win.
Auditing doesn’t just help you from committing the biggest business blunders of your fiscal year, but it also equips you with a financial view into your operation and empowers your team to make informed decisions for the future.
Key metrics that you’ll be able to mine from your auditing efforts in order to maximize the value of your process includes:
- Most profitable shipper relationships
- Optimal route combinations
- Internal efficiencies and more
Time is Money. This is How You Can Beat the Clock.
While auditing is essential, it’s no surprise that the attention to detail it requires to execute effectively can consume a considerable amount of your internal resources.
A few less than exciting to-dos your team will have to take on include, but certainly aren’t limited to:
- Double-checking ledger codes
- Verifying compliance with applicable tax laws
- Making sense of hand-written notes from drivers on scanned images
- Accounting for accessorial charges
- Confirming fluctuating oil prices
- Finding and reviewing any relevant correspondence
- Justifying all applied discounts
- Validating the freight class per NMFTA standards
- Recalculating totals
These tedious tasks demand valuable energy of your qualified, experienced team that would be better spent on more strategic initiatives to help you drive higher revenue. If resources are tight, the smartest thing to do is to retain your team members, boost productivity and foster an environment for growth by outsourcing this process to a back office partner you can trust.
By embracing the ‘staff on demand’ concept and leveraging your own alternative workforce of subject matter experts, your data will be audited in less time, for less money and with much higher accuracy than you’re currently generating.
An Extra Pair of Eyes and Ears on the Field.
As a bonus, a well-respected and well-connected partner will keep you in-the-know with market trends and forecasts so that you don’t have to do it on your own. Their relationships and thought leadership are all perks that come with the key benefits you’re hiring them for (experience, technology, other capabilities). By teaming up with a credible, subject matter expert, you can stay on top of what’s going on both inside and outside of your organization.
DDC FPO currently processes 30% of all LTL bills in North America, and our clientele is representative of 25% of the top carriers as ranked by revenue. We’ve built and deployed more back office solutions for the logistics and transportation industries than any other company, including freight rate auditing.
Discover what you’re paying for processing your freight bills in-house by completing this fast and free Price-Per-BOL Calculator. To learn more about the results we drive, check out our case studies. For more useful resources, be sure to subscribe to our blog, Freight Process Insights.