Optimize your freight spend by turning post-audit findings into strategic decisions that improve operational efficiency and profitability.
Optimize your freight spend by turning post-audit findings into strategic decisions that improve operational efficiency and profitability.
Shipping costs make up a significant portion of a business’s expenses, especially for those heavily reliant on logistics. According to the industry study, logistics costs can exceed 10% of a company's total business turnover. Among all the charges, freight charges can consume a large chunk of a company's budget, and unfortunately, errors within freight bills often go unnoticed, leaving businesses to absorb the costs.
Imagine that your freight expenses are climbing gradually while your revenue remains stagnant. This scenario can be quite frustrating for any business!
To address these challenges, implementing freight post-audits becomes essential for identifying costly billing errors and operational inefficiencies, and uncovering opportunities for long-term logistics cost optimization.
Why does freight post-audit matter?
Freight bill errors, such as incorrect rates, duplicate charges, and overlooked accessorial fees, can have a substantial financial impact if left undetected. According to the industry study, billing errors are found in 5-6% of freight invoices, which can result in significant overcharges for businesses with high shipping volumes. Over time, these errors compound, causing businesses to lose thousands, even millions of dollars.
By conducting a freight post audit, companies can recoup lost funds and ensure that they don't overpay for services that were not rendered or inaccurately billed.
Now, doesn't it sound huge?
Undetected freight bill errors can strain profit margins, diminish ROI, and hinder the ability to invest in future growth. While real-time audits are essential, they may not catch every error. This is where a freight post audit proves invaluable. The freight post audit examines all invoices after they have been paid, ensuring that no error slips through the cracks and providing a comprehensive financial review of your logistics spending.
Identifying recurring issues through freight post-audit analysis
A comprehensive freight post-audit does more than correct individual mistakes; it reveals patterns and recurring problems that contribute to logistics cost inefficiencies. For instance, post-audit analysis may reveal certain carriers consistently overbilling or uncover incorrect application of accessorial charges like fuel surcharges or detention fees.
By identifying these systemic issues, businesses can take targeted steps to address and eliminate the root causes of these errors. This proactive approach not only recovers overpaid amounts but also positions companies to prevent future mistakes, leading to a greater Freight Audit ROI. By conducting a thorough post-audit of your freight bills, companies can not only identify errors but also develop strategies for long-term logistics cost optimization.
This is where Pando steps in!
Pando’s AI-powered, no-code platform enables businesses to stay compliant and operate efficiently by automating regular audits and data analysis. It proactively identifies risks, provides actionable insights, and suggests improvements to optimize operations and ensure sustained regulatory compliance.
Leveraging Pando to implement strategies for preventing future billing errors and overcharges
After identifying recurring issues through post-audit analysis, businesses can implement targeted strategies to prevent future billing errors. Additionally, Pando's post-audit analysis allows businesses to delve deeper into the findings, providing actionable recommendations tailored to their specific needs.
Some effective approaches include:
- Strengthening carrier contracts: Vague or incomplete carrier contracts often lead to billing inconsistencies. The Pando system helps companies to refine these contracts and clarify expectations. Also, terms & conditions can help ensure that billing aligns with agreed-upon rates and services.
- Incorporating real-time audits and automation: While post-audits are critical, integrating real-time audits can catch errors before payment. Pando’s automated freight audit and payment platform reduces manual entry mistakes and ensures the consistent application of billing rules, enhancing accuracy and efficiency throughout the process.
- Creating a feedback loop: Use insights from post-audits to educate internal teams and carriers about recurring mistakes. Establishing a feedback loop encourages collaboration and continuous improvement in billing accuracy. Pando’s analytics and reporting tools can facilitate this process by providing actionable insights and fostering transparency among all stakeholders.
- Optimizing carrier selection: Post-audits can reveal carriers that consistently generate billing errors or overcharge. With this information, businesses can optimize their carrier choices, favoring those that offer reliable service and accurate billing. Pando’s carrier performance tracking features enable businesses to monitor and compare carriers, ensuring that only the most reliable and cost-effective options are selected.
By adopting these strategies and leveraging Pando’s comprehensive logistics solutions, businesses can protect themselves from future overcharges, refine their logistics processes, and ensure their shipping costs remain within budget.
Today, many companies have leveraged Pando's solutions to transform freight post-audit insights into significant cost savings. For example, a major $1 billion logistics company - Accuride had paid $2 million in unnecessary accessorial fees. After discovering Pando's platform, they decided to digitize their container tracking. By implementing Pando’s real-time container tracking system, the company saw a return of $3.69 in savings for every $100 spent on implementation and licensing fees. Over a three-year agreement, this led to a 3X financial return and a 6.5% reduction in total ocean freight costs.
The long-term benefits of shipping audit
The benefits of shipping audits go beyond simply recovering overcharges and analyzing discrepancies. By investing in a thorough post-audit process, businesses can unlock significant savings, strengthen carrier relationships, and ensure the long-term success of their logistics strategies.
Through Pando's regular audits and post-audit analysis, businesses can:
- Increase profitability: Post-audits contribute directly to cost optimization, freeing up funds to be reinvested in growth opportunities.
- Enhance carrier relationships: By addressing billing issues, companies can foster better communication with carriers, leading to improved service and more accurate billing.
- Gain deeper insights: Over time, post-audits provide valuable insights into logistics cost drivers, enabling more informed decision-making.
With Pando, freight audits go beyond recovery - they unlock lasting savings, prevent errors, and maximize your logistics ROI. Connect now to discover how we can transform your shipping process.
