You have the achy feeling that somehow, someway, your parcel shipping is draining your company of valuable revenue. Every month you see profits melt away with ever increasing shipping invoice bills that you have no idea if they are correct or just plain filled with mistakes and lost saving opportunities. What are you missing in terms of savings and knowledge about your shipping? So now you’ve come to the realization that the smart decision is to enlist the help of a parcel audit company to give those invoices a once over to see if what you are paying for is what you are really getting. Let’s take a look at the top 5 reasons that your business should use a parcel audit company.
1. Find and recover savings from shipping invoices
Death, taxes, and shipping invoice errors. Three inevitable things of life that every shipper has to deal with. Even with the billions of dollars of IT and software investments of FedEx and UPS, it is guaranteed that virtually every carrier shipping invoice contains errors. These may include: accessorial charges, rate inaccuracies, duplicate charges, and/or charges for shipments delivered outside the carrier’s service guarantee(s). Carrier errors are challenging to identify and entail a labor intensive recovery process. Consequently, most shippers unknowingly overpay their carrier with each payment sent resulting in a potential loss of over 6% on each invoice. A parcel audit company will review all carrier charges to ensure invoice accuracy and recover any refunds available for you.
2. Uncover carrier rate optimization (negotiation) savings opportunities
Death, taxes, and shipping rate increases. Sounds familiar? As with shipping invoice errors, the yearly rate increase is as inevitable as taxes. But the kicker here are the ever increasing and sometimes new surcharges that are nickel and diming shippers to death. Take for example the Maximum Limits and Oversize Pallet Handling Surcharge. Within a timespan of 6 months, UPS raised this surcharge from $150 to a whopping $650! And to top that off, UPS introduced an entirely new surcharge they're calling the "Audit Fee", which applies specifically to Shipping Charge Corrections. If the average Shipping Charge Correction in a weekly invoice is more than $5, this new fee will be the greater of $1 per package or 6% of the total Shipping Charge Corrections during the invoice period. The majority of these surcharges are negotiable along with discounts on rates.
A reputable parcel audit company can easily identify areas within your carrier contract that can be reduced. These carrier rate savings can add up to substantial amounts due to the fact companies have no idea if they are getting the best rates possible.
3. Data management and reporting
When was the last time you took a look your FedEx & UPS data? Did you even know there is such a thing? And even if you did see it, did you gleam any useful information from that gigantic CSV file? I’m guessing probably not. Shipping data is so dense and there is so much of it. A parcel auditing company gives you a resource to look at all this data in one place. It is especially helpful if you ship with more than one carrier to look at data side by side. Most companies allow you to do this through some sort of online platform that you connect your carrier accounts to. Once you connect your accounts to a platform all your shipping data is loaded in and broken down in many different ways. The ways in which data is broken down will vary depending on the company. You need to look at how much you are spending with each carrier, what services you use most, and how much money you can recover. It can also help you make informed decisions on which carrier is meeting your company’s needs.
4. In-house vs outsourced auditing advantage
It’s obvious that many companies have tried to do their own invoice auditing in-house to save on paying a third party to do it. But does it make sense? In-house invoice processing assumes that you have the required expertise and processes in place to capture, process, and procure the refunds on each invoice. With thousands of shipments and hundred of thousands of line items, companies must weight the cost factor of setting up such an invoice auditing process. Many find that this labor intensive endeavor is better left to a parcel audit company that has its own automated and manual operations that is optimized to find as many errors and get as many refunds as possible. This expertise and efficiency can be obtained for a small charge that in the long run will be more cost effective than setting up an in-house auditing plan.