Small Parcel Audit is a critical process that helps you identify and communicate billing errors with carriers. It also helps you save money by catching any overcharges, like additional surcharges or packages billed but never shipped.
Even major shipping companies make mistakes, but you shouldn’t have to foot the bill for them. By identifying overcharges and requesting refunds, Small Parcel Audit ensures that you only pay for what you receive.
In the age of globalization, e-commerce businesses depend on parcel shipping for fast, reliable deliveries. Unfortunately, as the industry has evolved, shipping rates have gone up and carriers’ service quality has gone down. This has led to a loss of profit for many companies. To overcome this challenge, many shippers and 3PLs are utilizing parcel auditing services to uncover hidden costs and improve their logistics processes. This helps them unlock the profit that is trapped in their supply chains.
Using the right parcel auditing software, you can identify and correct mistakes before they become costly financial headaches. This is important because human errors and billing issues can lead to major overcharges. The software can also help you spot opportunities to reduce shipping costs by consolidating shipments or negotiating better rates with carriers.
A good parcel freight auditing service will integrate with your e-commerce platform to automate the process of collecting data and analyzing it for insights. It will provide a full picture of your shipping operations by gathering information from multiple sources such as EDI, email, and carrier portals. Then, it will translate these various document types into a single, standardized record. In addition, the software should allow you to perform cost allocation at a line item level so that you can ensure financial compliance and maintain the accuracy of your data.
A parcel auditing solution should also offer customizable dashboards with performance indicators. This allows you to see key metrics such as shipping activity, late shipments, and refunds in real-time. Additionally, the system should be able to connect with your ERP or TMS systems so that you can automate invoice payment and reduce risk by minimizing manual intervention.
Automated auditing
If you don’t have the time or resources to manually review your shipping invoices, or if you want a more streamlined approach, automated auditing provides a solution. The service identifies billing errors and files refund claims, saving you time and money. The cost of the auditing service is typically a fraction of the refunds you receive, making it a cost-effective way to improve shipping performance.
A manual small parcel audit involves pouring over shipping invoices and carrier contracts to find errors like surprise surcharges, inaccurate billing, or duplicate charges. While this approach is effective for many businesses, it can be time-consuming and expensive. Automated auditing, on the other hand, uses software to check every line of your shipping invoices in real time and identify errors before they become costly. It also allows you to analyze the data and make more informed decisions, helping you save time and money.
In addition to spotting errors, a parcel audit can also help you get your shipping costs under control. For example, address correction fees can be mistakenly applied to the wrong shipments, and dimensional weight pricing errors can cause your shipping costs to skyrocket. These mistakes drain your profits and deprive you of the resources you need to grow your business.
Fortunately, most carriers have generous refund policies that compensate shippers for inaccurate charges and delayed deliveries. By identifying and recovering refunds, you can save up to 20% of your shipping expenses. In addition, regular parcel audits can help you optimize your shipping operations and strengthen relationships with your carriers. This helps you cut unnecessary shipping costs and increase your profitability.
Enhanced visibility
A comprehensive parcel audit can help you uncover hidden costs and save thousands of dollars annually. It can also improve operational efficiency and enhance e-commerce profitability. The first step in implementing a parcel audit system is to collect shipping data from multiple sources, such as carrier invoices and shipping manifest feeds. Then, centralize the data using a software tool to analyze and evaluate shipment trends and patterns. This can reveal new opportunities to cut shipping costs, such as consolidating shipments or negotiating better rates with carriers.
The process of analyzing shipping data can be time-consuming and labor-intensive, but it is critical to the success of your business. It can help you identify inefficiencies and opportunities for cost savings, as well as improve service quality and boost customer satisfaction. In addition to identifying opportunities for savings, a parcel audit can also reduce shipping errors, which can cause delays in deliveries and negatively affect customer experience.
In order to make the most of a parcel audit, you should start by reviewing shipping data at both a carrier contract level and at a per-invoice-line-item-level. This will give you a clearer picture of your transportation network and help you make more informed decisions during carrier negotiations. In addition, you should consider reducing the number of carriers you use to lower your overall shipping costs.
A thorough small parcel audit can identify overcharges and errors in your shipping data, ensuring that you only pay for the services you receive. Moreover, it can also improve your shipping processes and carrier performance by allowing you to analyze large datasets and pinpoint areas ripe for optimization. With a continuous monitoring approach, you can ensure that your shipping strategies are effective and deliver the most value for your company.
Recovering refunds
If your shipping carrier fails to deliver on the service guarantees outlined in their contract, they’re liable for refunds. However, finding those refunds can be a challenge. That’s where parcel invoice auditing comes in. This process meticulously sorts through past bills, checking for any errors or extra charges that may have been overlooked.
Recovering those refunds can help you save a significant amount of money without changing or disrupting your business processes. Invoice errors can add up quickly. If you’re a regular shipper of goods, one or two mistakes can result in a large sum that could otherwise be invested back into your business. Parcel auditing helps you catch these errors and recover the funds that you’re owed.
Aside from late deliveries, which can be covered by shipping carrier guarantee refunds, there are many other types of mistakes that can be uncovered during a parcel audit. These include surcharge mistakes such as address correction fees that don’t belong on the invoice, Saturday charges that aren’t valid, and dimensional weight errors where carriers incorrectly assess a shipment.
Aside from catching mistakes and recovering the money that’s rightfully yours, a regular parcel audit can also help you improve the way you use your shipping carriers. The money that you spend on unnecessary services or on overcharges can be reallocated to other parts of your supply chain, boosting efficiency and helping you achieve your business goals.
Building strong relationships with carriers
A robust small parcel audit system is a powerful tool for building strong relationships with your carriers. It compares the rates you’ve negotiated with your carrier against the invoiced amounts to spot errors like duplicate charges and missed discounts. The result is a comprehensive analysis of your shipment data that will help you make smarter shipping decisions, cut costs, and improve your bottom line.
In addition to catching and correcting overcharges, small parcel audits can also uncover service failures such as address correction errors and inaccurate dimensional weight measurements. These mistakes can result in lost revenue and customer dissatisfaction. By identifying and communicating these issues with your carrier partners, you can negotiate refunds and ensure that future errors are avoided.
Most carriers have very generous refund policies and are eager to compensate customers for mistakes like late shipments or incorrect charges. By leveraging parcel auditing solutions, you can maximize these opportunities to improve your supply chain and bottom line.
You can use a dedicated software platform or outsource the work to a 3rd party. Outsourcing is generally more cost effective and allows you to focus on other tasks that are urgent for your business. It will also eliminate the hassle of tracking every shipment, filing claims, disputing declinations, monitoring whether a promised credit has actually appeared on your invoices, and so on.
Aside from the obvious cost benefits, regular small parcel audits build strong relationships with carriers. They know that you’re serious about being paid fairly and on time. As a result, they will often step up their game in return. This can be in the form of faster deliveries or renegotiating contract terms to better meet your needs.