Cost Savings through Audit and Settlement

Audit and Settlement can identify potentially large cost savings in a number of ways.

Industry reports indicate that 15% to 25% of transportation bills are inaccurate, often due to errors in weight, fuel surcharges, duplicate charges, and exchange rates. In LTL, up to 80% of invoices may have discrepancies, leading to overcharges of 8% to 10% for shippers. Auditing and settling invoices is the final step in transportation, but discrepancies often arise before shipment.

Audit: Reviewing and approving an invoice across all transportation modes.
Settlement: Processing an invoice to a zero balance, finalizing the transaction between Debtor and Broker/Carrier.

Common Discrepancy Causes:
Quoted Rates vs. Invoice: Inaccurate rate quotes lead to mismatched invoices.
No quoting for shipments results in no record retention, affecting billing accuracy.
Bad item data: Incorrect item characteristics lead to errors.
Weight: Incorrect SKU application affects weight accuracy.
Inaccurate Density/Consumption/Class: Miscalculations affect shipment classification.
Commodity Type: Value and damage propensity can alter class.
Accessorial Charges: Unrecognized ancillary services lead to extra charges.
Fuel Surcharge (FSC): Changes in shipment characteristics affect fuel charges.

Systems and Processes:
Order Entry: Manual input, CSV uploads, EDI, or portal use can cause discrepancies.
Data Upkeep: Accurate inventory and SKU data are crucial for correct invoicing.
Processes: Shipping methods and routing guides can lead to errors.

Solution:
Synergies: Implement systems and people to coordinate shipments efficiently.
Build Systems: Systemize knowledge, fix customer and SKU data, and employ a TMS such as G2Mint
TMS: Must handle SOs and POs, calculate accurate rates, support web services, apply accessorials and FSC, and report on settlements.