What is Freight Audit - Guide

What is Freight Audit
(Top 5 Guide)

Freight Audit Guide

What is Freight Audit (definition)

Reading time: 3 minutes. Updated 5.5.2020

Freight Audit is the process of verification and analysis of freight bills for the purpose of cost savings and deep logistical insights.

This is a complex field, designed to provide businesses with a competitive advantage, improve logistical processes and support international and regional companies in their desire to optimize operations and expenses. There are three fundamental aspects to Freight Audit services: the traditional financial aspect, the data and analytical aspect and the customer support aspect.

Freight Audit is done either through manual review of freight bills or through the employment of advanced software, capable of analyzing and tracking incredible amounts of logistical data to provide superior billing accuracy and logistical analysis. Freight auditing can catch issues and overbilling even at early stages and provide explanations for various situations. Advanced service providers in this field often combine human expertise with technological innovation for the best results.

What is freight audit

The traditional financial aspect of Freight Audit allows companies to reduce their expenses considerably when it comes to logistics. In complex logistical operations, billing inaccuracies often crop up between the shipper and the carriers. This happens due to the complexity of contracts, transportation and warehousing methods, number of parties and shipments involved and many other factors. The traditional financial goal of Freight Audit and payment is to find and eliminate these inaccuracies, saving companies from overbilling and seriously reducing expenses. This not only allows for a better “bottom line”, but also improves the financial health of any logistical operation.

The analytical aspect is a feature of Top Freight Audit companies that use software and high-level business analytics to not only reduce client expenses, but additionally – provide a clear and deep understanding of their own logistics. This empowers business by showing the path towards optimization, fixing any long-standing issues, and improving control over their own logistical operations and relationships.

The customer support aspect, while being a fundamental feature of any Freight Audit provider, differs based on the technological nature of the company. High-technology Freight Audit firms are able to not only support customer requests, but can also offer custom-tailored solutions based on the unique nature of logistical operations of the client. 

Information is key for every successful enterprise. In the early stages of freight invoice auditing, it was all about making sure transportation invoice amounts were correct. Today's freight invoice auditing has evolved to a much broader service that provides valuable strategic reporting that enables you to stay ahead of the competition.

The ControlPay freight invoice auditing platform is an utterly logistics-driven and collaborative platform that is completely focused on handling the complexities of international freight invoicing flows. The system is fully web-based and enhances visibility on logistics data and processes to both shippers and its’ carriers. While most freight audit companies and post audit providers focus on payments and freight invoice data, ControlPay's primarily works with logistics data. As financial data is a mere result of your logistics operations, we step into the process here to standardize the financial implications and prevent exceptions and fix issues before they even occur. Thus the boundaries of your transport contracts are always abided by.

If you want to read more about Freight Audit and payment check out our infographic - everything you need to know about Freight Auditing


The complexitiy of Freight Audit

The complexity of freight related processes has been rising steadily over the years, as technology, rates, transportation modes and fluctuating prices for resources (such as fuel) have added new layers to logistics. Freight cost auditing may have been manageable in-house or through simple services years ago. However, this is proving increasingly ineffective in recent times.

The complexitiy of Freight Audit

With the rising complexity of freight cost and billing, human error has become a serious factor in low-technology review processes. This produces a significant danger of high overpayments for expenses that never actually occurred or are incorrectly evaluated.

The solution found by leaders in the Freight Audit industry has been to improve the technological methods of auditing, combined with human logistics expertise and know-how. Using specialized software that can track a considerable amount of variables, rates and other data, companies like ControlPay offer unparalleled accuracy, which counteracts the always-increasing chance of overbilling, invoice mistakes and other errors.

This approach of technological sophistication and human auditing expertise is superior to services that rely purely on manpower. Consequently, the cost savings are even more effective for companies seeking to optimize their logistics operations. ControlPay offers a comprehensive spectrum of high technology Freight Audit and related services, including: Ocean, Road, Air and Rail Audit; Parcel Audit; Warehouse cost management; Rate Management; Freight Tendering; Business Intelligence and more. Services are provided in a truly innovative approach that includes advanced software, cloud platforms and convenient stand-alone tools. Check out our blogpost about the best practices of Freight Audit for more in-depth information

What is a Freight Audit Company (FAP)

In a basic sense, this is a term for a Freight Audit Company that provides services of analyzing, verifying and correcting inaccuracies in freight bills and invoices. However, with the growing complexity of modern logistics and billing, basic terminology no longer covers the full spectrum of capabilities of Freight Audit Companies. Many service providers in this area offer process visibility, high-tech data gathering and analysis, optimization of logistical operations, consulting and more.

Cost savings and protection from overbilling remain as important (and sometimes - dominant) functions of a Freight Audit Vendor. Simultaneously, high-technology Freight Audit Companies incorporate software, automation and expertly trained auditors to bring freight bill verification and cost savings to a new level.

High-technology Freight Auditing logically leads to producing verifiably accurate logistical data that can be used for a multitude of purposes. Freight Audit Companies offer this universal data to empower their clients’ logistical operations as a tool for competitive advantage. 
A Freight Audit Company can offer different services depending on its technological level: while vendors working through manual document review may limit themselves only to verification of freight bills, IT-powered vendors can also provide Business Intelligence, Freight Tendering, Rate Management, Spot Bidding and other services.

Getting started
Implementations always commence with a kick-off in which all stakeholders are present. Guidelines and milestones are shared and questions are answered, after which a freight auditor unburds and provides for a solid execution of the meticulous plan agreed upon. The implementation professionals are also responsible for training staff and carriers. Based on the best practices a Freight Auditor turns a complex implementation into a comprehensible process for all stakeholders, while naturally adhering to the timelines agreed upon. After that, your ROI starts running and life becomes simpler.

What Freight Audit services are there

Freight Audit has a wide range of services directly or indirectly related to invoice verification, cost savings and many adjacent aspects of logistical operations. Services can vary based on transportation modes (Ocean Audit, Road Audit, Air Audit, Rail Audit, Parcel Audit, Warehouse Audit), technological level (electronic processing and e-billing or manual audit), stage of involvement (pre-audit or post-audit solutions), or the methods used to conduct billing and invoice verification (such as Control-billing, Self-billing and other solutions).

Generally, the range of Freight Audit solutions is fairly wide and depends predominantly on the expertise and technologies used by the service provider. High-technology Freight Audit companies tend to offer auditing services powered by software and cloud solutions with adjacent services connected to data processing and analysis. Traditional Freight Audit providers focus primarily on the manual review of invoices and bills, having a narrower scope of service features and possibilities.

Freight Audit services based on transportation modes can each have their own specifics, intricacies and require a certain type of professional experience, as well as adjustments in tools and methodologies. While high-technology Freight Audit providers have built innovative technological solutions that power their services, human knowledge and expertise is still needed to adjust, control and run automated systems. With the vast complexity of logistical operations around the globe, expert auditing skills are still a vital component of Freight Auditing.

Audit-related services that stem from data processing and software solutions (which is the main characteristic of high-tech FA companies) can come in the forms of: Business Intelligence and analytics services, Freight Tendering, Rate Management, Spot Bidding and others.

Why do you need Freight Audit?

Why is Freigth Audit and Payment important? Within the increasingly complex and varied world of global trade and manufacturing, Freight Audit offers a competitive edge to any company with global and/or complex logistical operations. This is done through cost reduction and savings, process optimization and streamlining, data visibility and much more.


With the level of competition and the lightning-speed of changes related to consumer markets, production, overall technological levels and so forth, keeping a solid hold of your costs and a clear understanding of your processes is a vital part of staying competitive and keeping up with the shifts in global trends.

Put in simple terms, if the competition is employing cutting-edge technological Freight Audit, they have the benefit of a larger resource pool, more efficient logistical operations and tighter control of their shipping, which directly relates to success in trade and the ability to make precise business decisions.
In the modern world, dominant global giants in tech, manufacturing and trade are already outsourcing their Freight Audit needs not only to reduce logistical budgets, but also to be able to predict possible issues, free up strategic experts and departments for maximum business output and truly understand the state and power of their logistical flow.

Comprehensive support of a razor-focused and robust service from a Freight Audit provider can empower your logistics and bring it to a new level. As logistical operations are the lifelines of any physical trade-oriented (or similar) business, it is impossible to overstate the need for efficient and accurate billing, data analysis and process optimization.

At the end of the day, Freight Audit provides stable control and reduction of your expenses and crystal clarity of logistical data for a multitude of business purposes, including strategic choices and tasks. Learn more about the 20 things to consider when choosing your freight audit provider.

ControlPay highly logistics driven freight invoice auditing services provides our customers with full insight in your domestic and international freight invoice flows while enabling you to achieve logistics cost saving up to 7%. As your global partner, we understand that a ‘one size fits all’ solution doesn't do the job. That is why our team of experienced logistic experts fly all over the world to make sure you get the solution you need. At ControlPay we take great effort in designing the best solutions to truly benefit all your global businesses.

With our highly effective control billing process, shipment order data is collected directly from your TMS or ERP systems and pre-calculated against the contract agreements and business rules set-up in our core system. During the pre-calculation process, we take all costs, including VAT, into account and instruct your carrier exactly the amount to be invoiced. No overbilling, underbilling or credit notes ever more.

Are you looking for an outsourced solution for freight invoice auditing freight invoice auditing? Please take a look at the following content, and discover how to build the business case, the value chain of freight auditing and possible strategies for a global freight audit & payment approach.

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