4 Common Mistakes Freight Audit Software Can Solve

The need for a global freight audit and payment solution continues to grow rapidly.

The high volatility of the global freight market drives this increasing appetite for clarity over supply chain operations. Many shippers incur as much as 10% of total expenses on transportation management. In an environment where margins are razor-thin, shippers must clearly see how their freight costs are allocated.

For many, the solution to this challenge has been embracing regular freight audits and robust freight data management and analysis. Freight audits can lower transportation costs by recovering extraneous freight spending caused by unnecessary charges, double billing, or other human errors. They are powerful tools that enable shippers to improve their visibility of every operational element of their supply chain.  

However, freight audit only works effectively when it’s implemented correctly. A series of mistakes can occur during the freight audit process. In this article, we’re sharing an overview of what they are and how you can avoid them with the right freight audit technology.

Trax provides industry-leading global freight audit and payment solutions for global enterprises. Read more about how outsourcing freight audits can reduce risks and errors and streamline operations efficiently: Should You Outsource Your Freight Audit and Payment?

1. Relying on Bad Data or Old Data for Transportation Spend

Clean, accurate data is the starting point for success in any audit. However, accessing that data is often a major challenge for freight audits. First, there’s the sheer quantity of data a complex supply chain generates. In addition to the reliance on disjointed legacy systems and numerous vendors, getting an accurate read on performance data is extremely challenging. 

The knock-on impacts have huge implications. Without accurate data, shippers are guessing every time they make a logistics decision. Procurement teams spend countless hours collecting and verifying shipment data to illuminate issues. The entire process results in firms leaving money on the table while experiencing substandard efficiency.

Committing to a standardized data management process across the supply chain is vital to ensuring a successful freight audit. With accurate shipment data as a starting point, freight audits are much more straightforward. Many shippers are adopting high-quality freight audit and payment tools, such as Trax, that serve as the foundation for a holistic approach to transportation spend management.

2. Inconsistent Evaluation or Action Based on Freight Data

It can be easy to cherry-pick certain shipments to audit, but the reality is that this leads to an inconsistent approach that can cause you to miss major discrepancies. Instead of only analyzing certain shipments, commit to auditing every shipment. 

This consistency enables you to identify trends through month-over-month and year-over-year comparisons, ensuring you never miss an issue that affects your margins. These issues can be any of the following:

• Carrier invoice discrepancies
• Duplicate invoices
• Inaccurate accessorial charges
• Incorrect billing data

Monitor the same metrics over time, including calculating cost to serve and invoice timelines. 

Shippers can take major steps toward transportation spend management maturity by embracing these best practices. A consistent, comprehensive approach to tracking and analyzing freight audit data gives leaders much more confidence to make the right business decisions.

3. Performing Freight Audits Post Payment

If you conduct freight audits after paying an invoice, your relationships with carriers will become strained. On-time payments are key to building strong carrier relationships and unlocking shippers of choice status. 

If you’re seeking refunds or clarity over other issues after an invoice has been paid, you’re slowing the whole process down, and carriers will resent you. For the first time in decades, shipping markets are increasingly favoring carriers. That makes it vital to maintain strong relationships with your key partners. 

Instead of performing freight audits after you’ve paid an invoice, take a proactive approach. To do this, many shipping companies outsource their freight audit processes to a third-party provider with a proven track record. Automating this process brings several benefits, including lightening the workload of your internal AP team and having an independent third party to arbitrate any disputes. 

Solutions like TraxPays enable shippers to pivot their freight audit process to be more proactive while creating complete visibility.

4. Not Learning From the Findings of Previous Freight Audits

Ultimately, any freight audit is fruitless unless you actively use what you learn from it to improve your processes going forward. If issues persist, it’s important to understand why and continuously share that visibility with leadership.

Unfortunately, it’s too common for shippers to perform a freight audit, correct the issues, and then act like nothing ever happened. This approach achieves little for your business and causes problems to occur repeatedly. Instead, shippers should work with carriers to proactively address the issues flagged by freight audits. 

At Trax, we aim to help shippers identify the root cause of all freight audit issues. However, identifying and reporting problems like invoice discrepancies isn’t enough to affect cost savings—you need the insights to tackle them head-on and resolve them quickly. 

Your goal should be to eliminate mistakes from your supply chain. By actively leveraging the output of freight audits, leaders can design and implement meaningful solutions that eliminate issues over time and optimize cost savings.

The Right Freight Audit Solution to Increase Cost Savings

Freight audits are crucial to the wider transportation management process, unlocking new efficiencies, promoting compliance, and enabling significant cost reductions across supply chains. However, achieving this visibility into global transportation spending demands a focused and sophisticated approach. 

Trax empowers organizations with complex global supply chains to have greater control and visibility of their cost structures and supply chain performance. Our cloud-based Transportation Spend Management platform and analytics suite dramatically simplify the freight audit process, helping shippers streamline logistics costs while maintaining strong relationships with leading carriers. 

The platform is used by hundreds of global customers, tracking over $22 billion in freight spend.

Interested in learning more about how Trax can help you optimize your transportation spend? Contact our team today.