20 Top things to consider when choosing your Freight Audit and Payment Company

June 14, 2018 - 17:00

Update 5-5-2020

For a global brand with global logistics costs, only a Global Freight Audit services will do. There are vast differences in the working methods of various Freight Audit Providers. To be able to offer international services, you need to be well-versed considering the fact that the US Freight Audit market, for example, is completely different to that of Europe or Asia. We are here to help you make the right choices. What do you need to look for when selecting the right partner, and what are the potential pitfalls? Depending on your organization, it’s possible that other factors are important which may not have been included on our list; however, it will provide a good starting point at any rate.

The majority of companies shipping goods allocate more than 50% of their total logistics costs to transport; outsourcing of freight audit (and payment) certainly has its advantages. Furthermore, differences between FAPs can be observed ­– as some focus on cost saving and others go much further in offering multiple services and tools, such as business intelligence. Many people in the logistics sector also think that Freight Audit only provides cost saving due to the removal of overbilling. Quite the opposite is true, however; good Freight Audit also ensures increased freight visibility and actionable data, for example. They ensure that you stop overpaying through correct invoices rather than through handling exceptions. 

Why would you like to work with a Freight Audit Company?

  • You’re interested in how they can benefit your organization
  • You’re unable to do it internally
  • Self-billing systems are ineffective. This is only possible with 100% correct data
  • Keeping track of rates isn’t working
  • We don’t encounter 100% correct freight rates
  • Accessorials not under control?
  • You want to save on freight charges
  • You want to save on personnel costs and see where efficiency can be improved
  • You want transparency in your freight charges

Importance of a Freight Audit Company

The 20 key points in selecting a Freight Audit Company

Let us know if you have any further questions. We’re happy to help! If you ar elooking for in-depth info about Freight Audit make sure to check out our Freight Audit Guide

1.Look further than the basic services offered by FAPs. These days, they can offer so much more than only the cost advantages of Freight Audit. Which additional tools do they provide?
2. Important characteristics of Freight Audit Providers are reputation and stability. How long have they been an active market player? Do any relevant quality labels or (ISO) standards apply? Request extensive references. If additional tools are offered by the FAP, request tool-specific references.
3. Invoice consolidation. Look for a Freight Audit Provider that is able to consolidate shipments. Non-consolidation means that you are losing money, or you need to create workarounds to calculate it correctly. When outsourcing freight audit, the main focus is often on achieving cost savings on freight spend. Therefore, make sure your carrier does the correct shipment consolidation of your LTL, parcel and Air shipments.
4. It's all about cutting-edge technology, and technology changes at an incredibly fast pace. Be sure to ask to what extent they invest in IT annually.
5. From the Finance Department and Management to the transport planner, everyone has access to a good deal of transport data. Before data can be analyzed, it is essential that the data is clean and correct. This is where the advantage for audit and payment begins; this helps the organization to achieve competitive advantage with, for example, improved budget planning. The FAP focus should rest on the logistical data.
6. Significant differences exist between the United States and Europe, and the Asian market also has its own idiosyncrasies surrounding auditing. How experienced are they in these markets? Essential questions to thoroughly research, especially as a global market player. Can the freight audit provider handle various currencies and languages?
7. In this sector, you get what you pay for. You don’t really want to find that out the hard way, so be wary. An FAP that positions itself at the low end of the market won’t do you justice; it’s all about quality.
8. Enquire thoroughly about what they can achieve with freight visibility. What will you gain insight into and what can you do with this data?
9. Invest further than in an audit provider’s client references; look into the carriers as well. Study the collaboration between carriers and the FAP. How is this arranged, how is the technology structured?
10. How do they process manual information from carriers, such as price lists that require manual entry?
11. Collaboration with a Freight Audit provider is a long-term partnership. Cooperation often begins with intensive preparations. Making a good choice is essential.
12. Clients sometimes see an FAP as an expense rather than a value-adding partner. How do you view this?
13. Ask about their customer service; how is it arranged? Has a separate system been created or is it arranged via email? This will regularly affect your day-to-day collaboration and is an important factor to look into.
14. Coding and reporting: Naturally, you don’t want freight invoices to be overpaid or paid double ­– but the possibilities reach much further. This includes features such as automated cost center allocation. The possibilities are extensive so look into the many options on offer.
15. As an organization, you need to think strategically. Think beyond your current needs; take your future needs into consideration. Include projected growth in your discussions; can they scale up, if necessary? This is especially key on an IT level.
16. The collaboration will influence your relationship with carriers; the FAP forms a component of your cooperation processes. How do they handle carrier support? What do carriers think of their interaction with the FAP? Your provider should form an extension of your own organization; how will they fulfil this role?
17. It takes quite some time to implement a good freight audit and payment system with the corresponding rates of all carriers. The FAP should be able to advise you and assist with simplifying the rates, harmonizing other cost mechanisms and setting limits to accessorials. The objective is to establish an efficient total process.
18. Thorough research in advance is the foundation. Look into the organization’s financial stability. Especially if they will also take care of your freight payment.
19. There are diverse transport modes in the logistics sector. Make sure your provider is able to handle all of the transportation modes used by your business. Can they also gather all of the data in one system? Are accessorials included in all modes? Multiple modes are sometimes included in one shipment, are they able to handle this?
20. One final piece of advice: Visit the firm, and don’t limit yourself to the conference room but observe the team in action.

Other Freight Audit Resources

About ControlPay

ControlPay is, with a growing staff of over 250, the largest freight audit provider in Europe. The history of our business goes back to the year 1969, with the start of a logistics consulting company resulting in different ventures in logistics and transportation until we decided to redefine Freight Audit & Payment at the start of the century. Nowadays, ControlPay supports many large multinationals with complex logistics structures in their needs for control of freight costs and invoices flow. Want to know more about our services? Just contact us!

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