Updated: 03-05-25
Key Takeaways
- Freight audit companies help streamline operations by automating invoice verification, error detection, and compliance management.
- Key benefits include cost savings, real-time error detection, data insights, and process efficiency.
- Selecting the right freight audit partner requires evaluating technology, scalability, industry expertise, and ongoing support.
- AI-powered and machine-learning-driven platforms provide the most accurate, scalable, and efficient auditing solutions.
- Trax offers global freight audit and payment solutions, reducing costs, improving vendor relationships, and enhancing supply chain visibility.
Audits, love them or hate them, are an essential part of the business process. For most, the word sparks thoughts of an army of processors tediously combing through stacks of transportation invoices and payments. This manual process is slowly giving way to a more digitized system where information is easily aggregated, deciphered, and turned into actionable insights through advanced data analytics.
As the global supply chain has become more complex, so has the audit process. In recent years, organizations have started turning to freight audit companies to help streamline the process and reduce operational costs. However, finding and evaluating a freight audit company can be a daunting task.
A freight audit company will inevitably affect an organization's bottom line, for better or worse. So, it pays to put them under the microscope and assess them with scrutiny. Knowing what to look for and potential pitfalls will help you find a solution that meets your current needs and can easily scale alongside your business.
Trax is a global leader in the freight audit and payment (FAP) industry, helping to simplify the complex challenges of transportation spend management through cutting-edge technology, machine learning, and artificial intelligence.
Understanding Freight Audit Companies
Before we can jump into the deep end, let's cover a few basics to get you started. Freight audit companies cover a lot of ground and can impact several areas of your business, including logistics costs and overall supply chain efficiency.
First and foremost, freight audit companies are built to examine, verify, and adjust freight invoices. Most companies that handle this process internally go through these steps post-payment. In contrast, freight audit companies will put systems and processes in place to catch potential errors on the front end, saving time and money.
However, the role of freight audit companies, like the supply chain itself, has evolved to include regulatory compliance, contract management, freight rate monitoring, managed services, and more. These processes are accounted for with a traditional business model, but they may be disjointed. Different processes may be in place to collect information or third-party data, leading to prolonged processing times and potential blind spots that limit insights.
Freight audit companies, and the FAP technology they leverage, centralize the process. Information is aggregated in a single platform, resulting in more reliable data, reduced overhead, and improved scalability.
The Benefits of Partnering with Freight Audit Companies
The central theme with any freight audit company evaluation will inevitably revolve around ROI – and rightfully so. The following four benefits should be measured and weighed as much as possible through the evaluation process.
Cost Savings
At the end of the day, the goal is to put processes and systems in place to reduce transportation management costs, plain and simple. Freight audits catch potential invoice errors and correct them before payment is made, saving money in two ways: with the payment itself and by eliminating the man-hours needed to identify and resolve with a post-payment process.
While this may be the first cost center you look at, it is far from the only one impacted by a FAP system. Fines associated with failed regulatory compliance, new vendor acquisition costs, and more can be reduced when you have reliable, comprehensive data.
Error Detection and Resolution
Manual auditing is an imperfect process, at best. Even the most experienced auditors won't catch 100% of errors that come across their desks; even if they can catch the majority of issues, they only have so much bandwidth.
Tools powered by machine learning and artificial intelligence work constantly in the background, scanning data with the sole purpose of detecting anomalies and reporting potential errors. Factors constantly fluctuating, like freight rates, are analyzed in real-time, so even if a set of eyes is still involved in the verification process, it can happen before payment is issued.
Data Insights
As you evaluate a potential freight audit company, don't overlook the potential value of data insights. Transitioning to a centralized digital process means you will have access to data that is accurate, comprehensive, and relevant.
Post-payment audits may generate data, but it is more often than not outdated and missing components, leading to a reactionary approach to decision-making. A robust freight auditing system provides valuable business intelligence that can inform strategic decisions across your supply chain.
Process Streamlining
With improved error detection and resolution, the payment process will inevitably improve. The process of manually issuing payment is replaced by an automated process when leveraging FAP tools. Not only does this improve the speed with which invoices are paid, but also their accuracy, resulting in better vendor relationships. An accurate payment process removes the need for the all-too-common back and forth associated with rectifying errors in a post-payment audit process.
Selecting the Right Freight Audit Partner
Every company has different needs, challenges, and goals, making it hard to pinpoint precisely what is best for your organization. There are a few key components to look for and put under the microscope when evaluating freight audit and payment providers.
Criteria for Choosing a Freight Audit Company
Benefits and ROI might catalyze exploring a freight audit partner, but what should you look for? What are good signs compared to potential red flags?
Technology→ Perhaps more than anything, technology should stand front and center. Industry-leading FAP technology is designed to serve as a single source of data and should be powered by machine learning and AI. Anything less complicates the process, even if it goes through a single platform.
Implementation→ The time required to implement a freight audit solution varies based on the complexity of your operations. Global organizations with multiple carriers, modes, and regions naturally require a more comprehensive onboarding process. While some providers may promise faster implementation, their solutions may not support global-scale needs. Trax is committed to balancing speed and precision, leveraging AI to streamline carrier onboarding and accelerate time to value without compromising accuracy or scalability.
Scalability→ Chances are, your business is growing if you are looking at a digital freight audit and payment process. But what will that look like in five or ten years? Having a solution that can scale with your business provides peace of mind and saves time and money.
Industry Expertise→ Not all auditing tools and companies are designed for logistics. That isn't to say that they aren't worth exploring, but inside knowledge means tools are built specifically for the challenges of working within the global supply chain.
Ongoing Support→ We live in a transactional world, and many freight audit companies have adopted a SaaS model, where customer service is limited. Look for a company that provides ample ongoing support, including training opportunities and transparency when updates to the platform are made.
Cost→ Yes, cost matters. Your budget is essential, and it should play a role in the process. That being said, you have to look beyond the sticker price to fully understand the total ownership cost. Consider the cost of underperforming carriers within your network and the savings generated from a pre-payment audit process.
Streamline Your Freight Audit Process With Trax
Choosing the right freight audit company as your partner is a big decision that will impact several business areas. But it doesn't have to be overwhelming. With the right approach and a clear understanding of your goals and current challenges, you can streamline your process and reduce operational costs.
Trax's global freight audit and payment solutions are designed for complex, global organizations looking to streamline how they manage their audit process. Our industry-leading technology can help you reduce transportation spend, improve vendor relationships, and deliver fantastic customer service.
At Trax, we take a holistic approach to freight audits, covering everything from freight bill auditing to carrier invoice verification, ensuring your freight costs are accurately managed and optimized. With our powerful business intelligence and data analytics, we turn complex transportation data into actionable insights that enhance visibility and drive smarter decisions across your supply chain. Plus, our expertise in carrier management and logistics consulting helps you streamline payments and smooth out any bumps in your transportation operations.
Connect with our team to learn more about our global freight audit and payment technology and how we can help you optimize your transportation spend management with our innovative supply chain solutions.