What is a Freight Audit Software?
Freight audit software is the digital, state-of-the-art tech solution for hundreds of pain points involved in freight logistics. Such challenges and problems many companies face include:
- Reducing contractual errors in payments for freight shippers
- Tracking down accurate costs, expenses, and profits related to freight movement
- Resolving millions of dollars of loss when shippings are derailed by an ineffective carrier
- Optimizing inventory levels and transportation routes
- Identifying consolidation opportunities where operators can trim costs simply by making smarter decisions in picking the right courier
Speeds Up Processes
A freight auditing software expedites the process of examining freight bills, freight invoices, and other documents related to whatever domain of freight activity. The objective of this audit is to ensure that the company’s relationship with its shipping partners is on track, as well as all transactions related to shipping are examined, adjusted, and completed in accordance with government policies and company agreements.
Accurate Data Always
The need for efficient and accurate supply chain management is increasing as world trade grows bigger and becomes more digitalized and connected. In fact, the World Trade Organization estimates that the global trade volume will grow by 4.7% until the end of 2022, even against COVID shorted estimates, and will even reach north of $28 trillion beyond that.
Eliminates Frustrating Manual Data Inefficiencies
The traditional way of managing freight and logistics operations is time-consuming, paper-based, error-prone, and often frustrating for employees. The result is that companies lose time and money due to inefficiencies in their supply chains. In a recent report from Wall Street Journal, it was found that many companies today are still paying the price of non-compliance.
The report suggests that companies that used freight auditing software can reduce redundancies and increase their ROI by at least 3%.
How Does Freight Auditing Software Save Me Money?
Freight auditing software is the answer to all the costly errors experienced in freight shipment because it saves you money by:
- Providing managers with better tools to track shipments and logistical operations in real-time, from the time it’s scanned by infrared sensor terminals to the time it’s compared to the original booking
- Eliminating redundancies and inaccuracy of shippers and supply chains
- Verifying transactions, including costs on accessorial, late deliveries, freight classification changes, and discounts
- Creating better contracts with major freight payment companies with multiple currencies and languages by processing large volumes of data accurately
- Providing convincing data from external or internal sources such as invoices, bills of lading, purchase orders, et. al. for better comparison benchmarks
- Documenting every detail through in-class reports inside the software for everyone to access in real-time, anytime anywhere, even offline.
- Resolving discrepancies faster between information encoded in the software
- Alerting managers immediately when problems arise so that actions are made before anything escalates.
In short, robust freight audit software saves companies money by providing accurate data at all times when managing their freight operations and making key decisions.
What Is a Freight Post-Audit?
Freight post-audit is the process of auditing freight bills to make sure that the freight bills are accurate and to help companies improve the accuracy of spending on transportation. It is possible to do freight post audits in-house or outsource the process.
The primary difference between a freight audit and a post-audit is that in the latter case, once the shipment has been completed and paid for, someone else does all the legwork for you (e.g., by identifying discrepancies).
In other words, a freight audit is a method of checking the accuracy of invoices by comparing them to actual transportation costs. It can help you identify opportunities for cost savings, but it’s important to remember that freight audits don’t always have an immediate impact on your bottom line. They provide an opportunity for you to identify areas where costs may be too high and initiate adjustments accordingly.
Unlike a freight post-audit, freight audits, however, allow you to have more control over what happens. You decide which bills get audited based on their dollar amount or type (e.g., fuel vs driver wages), then go through each item line by line until everything adds up correctly before making the purchase.
What Processes Are Involved in the Freight Audit Process?
Many companies are turning to digital solutions and software for their freight auditing needs because it saves the company’s valuable time and resources in handling freight processes.
These freight audit processes include:
- Supply chain and overbilling protection
- Accurate invoice verification
- Removing carrier delivery duplicates
- Superior practices in reviewing rates
- Compliance in transportation contract deals
- Warehouse optimization
- Better research results in finding the best industry rates through collaboration tools
When you think of freight auditing, you probably imagine a room full of employees with clipboards in their hands and pencils behind their ears. But that’s not what it looks like anymore. While most companies still use their traditional methods to audit and verify their shipments, more and more companies are turning to software to scale up their output and the quality of their work faster but safely.
In other words, freight auditing processes are an important part of any company’s quality and safety management, but they can be a time-consuming process. Without the right freight auditing software, they can also be complicated for employees who aren’t familiar with the process or don’t have the skills necessary to do it properly.
What Are the Different Types of Freight Audits?
Freight auditing software can be used across the wide, complex variety of industries that best benefit from it. There are also different categories depending on the utility.
These are the three types of freight audits according to input type:
Manual audits
These require employees to manually review each shipment before it leaves the warehouse or factory. Manually reviewing each shipment takes time and resources, which means that they can’t be done as often as they should be (or even at all).
Automated Freight Audit Processes
These are done using software that automatically checks each shipment against pre-defined criteria before it leaves the warehouse or factory (for example: temperature). This method requires less time than manual audits but has limitations because it can’t check every aspect of every shipment that needs checking (such as humidity).
Hybrid of Freight Audit Processes
A hybrid of freight audit processes combines the benefits of both manual and automated freight audits. By combining these two methods, you can streamline the process of conducting a freight audit while still making sure everything is done correctly.
For example, if you have one shipment that takes 2 days to get from point A to point B, but another shipment takes 3 days, this could be an indicator that there’s room for improvement in your process. You can then use, for example, ocean freight auditing software to mark this route and find better alternatives to transport the product.
These three major types of audits according to input can be used in a variety of audit types according to location, such as:
- Land Audits – used to improve pricing of transport specialists, express parcel delivery time on the road, and road logistics barriers.
- Ocean Freight Audits – used to analyze bulk orders of container shipping services. The use of an ocean freight auditing software will help you figure out if Full Container Loads (FCL) or Less Than Container Loads (LCL) are the best methods to use in large-order shipments to minimize costs.
- Warehouse Audits – used to make sure inbound and outbound processes are streamlined, so no orders are duplicated and no warehouse space is rendered dormant without the risks of over-optimization.
How Can Freight Audits Benefit Managers, Employees, and Enterprises?
Auditing freights using software isn’t just important for your company’s bottom line. It also offers tremendous benefits to managers and employees by always ensuring quality and safety across operations.
In other words, when you’re dealing with massive amounts of data every day, you need a freight audit software to help you centralize all the information you need to conduct an audit. This is needed to finish your audits quickly and easily, especially in large volume shipments in ocean freight auditing software.
And since these systems are digital tools, they’re much more efficient than traditional paper-based processes in extracting shipment costs, uploading vital data, matching invoices, approving payments, reporting mistakes quickly, and many other vital processes.
Fortunately, Lumiform understands all these elements and has made sure to integrate them all into its freight auditing app. In fact, here are the many other ways Lumiform can change the lives of employees and enterprises:
Real-time Collaboration That Leads to Better Inventory
Lumiform’s freight auditing software allows managers and inspectors to access data about shipments at any time and see where they are in relation to the delivery schedule or when they will arrive at their destination.
In short, Lumiform solves the problem of having to skim through time-consuming, costly high-volume data from shippers that can produce distracting noise rather than insightful signals that can improve operations.
With this leverage from Lumiform, companies can quickly:
- Resolve numerous errors in real-time to avoid escalation
- Maximize electronic invoicing, audits and inspections via the mobile app
- Plan ahead for incoming shipments
- Execute better payment terms
- Make sure that they have enough space available in their warehouses for incoming products
Increase Returns on Logistics Spend by Reduction of Cargo Damage
By creating Lumiform custom forms that reduce the amount of cargo damage and improve freight management, you can see a significant improvement in cash flow. This is because less cargo damage means fewer claims for damaged goods and less money spent on new inventory replacement. You’ll also see higher customer retention rates (and thus customer satisfaction) as a result of improved product quality.
With Lumiform’s built-in quick form builder, you can record all the necessary information about each shipment in a snap, including: date of departure, date of arrival, tracking number, weight, and more. This volume of data can then be accessed from any computer or mobile device at any time without any problems whatsoever, improving the turnaround time of all your employees.
Uncover and Resolve Costly Risks From Carrier Disputes and Non-compliance
Lumiform’s freight audits make a big difference to companies’ profits by saving them millions of dollars every year from potential lawsuits. For example, by using the ocean freight auditing software, Lumiform can easily track leak areas in revenue that was lost due to non-compliance errors and omissions in freight invoices.
Because of Lumiform, the manager can then initiate actionable steps to not repeat the mistakes by ensuring a buffer is implemented properly as a preventive measure.
Boost Workforce Morale Through Better Accountability
In addition to all of the upfront benefits, using Lumiform’s freight audit software can also result in more satisfied, motivated employees. That’s because there will have been more accountability for the ownership of mistakes. It’s easier to make employees work harder and feel they’re working toward something bigger than themselves when productivity mistakes are properly accounted for. Correctly attributing to the agents responsible creates an honest work environment.
As a result,
adapting Lumiform’s software into your organisation structure can improve employee retention rates because if employees feel like they’re part of something important, they want to stay there. Another commendable side effect is that this can lead back around again to increased customer retention rates, as customers will appreciate the consistent level of service provided by your satisfied employees over time.