How Freight Audit Converts your Freight Invoice in Business Intelligence

Pieter Kinds

Pieter Kinds

October 2, 2015 - 07:46

Is Freight Audit really the holy grail? Are the 3% basic savings of freight overbilling really opening everyone's eyes? No, but what very few people realize is that by having an automated Freight Audit solution in place you get data that is extremely important and valuable to your organization.

Freight audit & payment providers today strongly focus on applying deep analytics, connected with logistics & supply chain consulting expertise, providing shippers strategic insights from transportation data. Advanced providers deliver business intelligence solutions that quickly and clearly visualize those findings to support shippers in the tactical and strategic decision-making process, that will improve supply chain efficiency and cost-reductions.

So why should global shippers nowadays focus on the logistics data?

Many companies recognize freight audit & payment as a critical practice due to the high error rate and labor intensity of processing the thousands of (non-consolidated) freight bills companies receive monthly. But there is more to freight auditing than meets the eye.

According to the "State of Logistics” report, transportation and logistics costs (freight spend) for companies that haven’t adopted a logistics efficiency solution, swing between 9% to 14% as a percentage of sales, depending on the industry sector.

This stand for a big piece of the expenditure pie, and shippers today simply demand more insights in this expenditure than 10 years ago. But where is your financial department, or logistics department getting the indispensable intel?

More and more companies are beginning to understand that freight audit & payment providers are the solution to this demand. Besides ruling out overbilling (a one-off 3-5% saving), the service increases efficiency and decreases transportation costs thanks to the data coming from the automated freight audit process. A recent study by American Shipper shows that the need for clear and reliable data is growing fast, and large shippers are leading the way.

How Freight Invoice Data is being used

How Freight Audit converts your freight Invoice in Business Intelligence

Large shippers generate reports using freight payment data more often than their smaller counterparts, including substantially broader use of their vendors and payment systems to generate these reports. Large shippers also appear slightly more advanced in their use of payment data, whether it's to simply track spend, or in more sophisticated uses, to index rates or track carrier diversification. It is no wonder that around 60 percent of shippers and nearly three-quarters of 3PLs say their audit savings are meeting expectations.

Added value for the Logistics AND finance department

The clinical data is not only useful for logistics, but also for finance and even further in the organization, for example in planning and sales. That data allows you to optimize, renegotiate, improve contracts, relationships, processes and procedures. Best-practice shippers nowadays already use this valuable function and put Freight Audit to work in a strategic way.

So what kind of valuable logistics data can be extracted from your freight invoice?

Freight invoice is a source of extremely valuable data regarding the shipments. It contains such information as:
1) Geographical bounds of shipment (route of delivery: from which location the goods were picked up and to which location are delivered).
2) Shipment time (sailing date and arrival date).
3) Shipment references (shipment number, delivery number or any other unique code).
4) All info about the consignment (weight; volume; quantity of containers/pallets used; additional characteristics, such as product type: whole goods, raw materials or parts).
5) Transportation mode and type of load.
6) Commercial terms under which the consignment was delivered (Incoterms).

Why should companies automate freight audit?

ContorlPay's automated freight audit platform allows the client to:
- Store all the info related to each and every shipment (freight invoices, PODs, ratecards etc) in one place
- Locate all of the logistic data related to customer's different global sites, business units, carriers at one electronic system
- Systematize and analyze all the shipment data
- Predict possible expenses for transportation
- Ensure correct invoices calculation
- Avoid double payments
- Save on own FTEs hiring

How makes ControlPay this possible. How do we get this valuable data?

Data from the freight invoice can be extracted via 2 methods:
a) Invoice data entry specialist manually enters data from PDF to our database.
b) Along with the PDF-copy we are provided with XLS (or CSV etc.) copy of invoice, which is automatically grabbed and uploaded into our freight audit platform.

By both means, the data results we have standardized. The most important value for shippers is that all data is being stored and this data becomes absolutely transparent and reachable 24 hours 7 days a week for all parties concerned (Shipper, Carrier and Freight audit provider (CP). The data is stored in an exceptionally convenient format and, moreover, it can be easily extracted for additional analysis by means of reports creation in our freight audit platform or in a more extended way the in Business Intelligence tool. This process is fully automatic and solves a big problem many shipper encounter: pulling data from different systems and different parts of the organization and harmonize the data structure.

Usually, the procedure is established in such a way that no manual work is needed at all: files are automatically pushed from shipper/ carrier's database (e.g. electronic billing hubs). As a result, data becomes visible almost straight away: the invoice billed today will become visible the next morning.

Why many global Automotive, Manufacturers, Retail, Pharma and large E-commerce companies work with ControlPay

ControlPay, which is using its own, web-based and progressive freight audit platform is Europe's largest freight audit provider. Our services are driven by deep logistics knowledge and the flexibility to customize to the needs of our multinational customers who we serve on a European or global scale. ControlPay delivers value to your organization by:

- Storing all the shipment-related info within one database
- Providing easy-to-download customized shipment reporting
- Ensuring correct invoice calculation
- Guarantied no double invoice payments
- Providing useful extra services and tools (auto-invoicing, payments, tender tool, accruals reporting etc.)
- Leading IT-specialists team securing fully automated process with innovative solutions as well as full support within the Freight audit process
- Well educated and dedicated audit team assuring transparent and low-touch audit within the strict terms