Three Huge Ways Your Company Could Be Losing Money On Each Freight Invoice

Out of every $100 spent across the United States, $6 are spent on transportation costs. Shipping and freight costs in the commercial world make up a majority of the transportation costs spent worldwide. If your work involves coordinating shipping for your company, you’re probably aware that 80% of shipping costs could be reduced through logistical improvements.

One great source of shipping overcharges come from human and processing errors due to the complexity of freight estimates and invoices. Here are three tips that help reduce freight costs by making the shipping invoicing process work for you:

1. Post Audit Freight Invoices
   The constant fluctuation of shipping costs due to changing fuel prices and the complexity of shipping quotes leads to a high probability for errors while processing invoices, resulting in companies paying for shipping services they didn’t get. Studies suggest that errors on freight invoices lead to an average overcharges of 5 to 8% on the overall freight budget.

   An easy way to avoid this is with a service that will post audit freight invoices. The cost of a third party who post audit freight invoices for your company, ensure that you are only paying for the shipping services that you owe and secure refunds from parcel carriers who overcharge is pennies on the dollar compared to the amount your company could be losing through invoicing mistakes.

2. Consolidation of Freight Invoices
   If your company processes hundreds of shipping invoices every week, it probably requires enough man hours dedicated to processing each invoice to account for several full-time employees in your accounting department. One way to save time and improve efficiency is by using a service who does all the legwork for your company, so that you only have to make one consolidated payment per week (or month, depending on the terms of your service).
   

3. Analysis of Freight Data
   Being able to slice and dice the data on freight costs in any necessary manner to create metrics that help shipping and logistics managers make strategic decisions is essential to cutting inefficiencies and optimizing savings. There are a variety of transportation management software solutions that can provide data analysis to improve freight operations, it’s important to review the benefit of several solutions, so that you find one that best fits your company’s business processes.

Conclusion
Studies suggest that without invoice auditing, invoice consolidation, and data analysis, each freight invoice that a company pays costs about $11 to process. By incorporating the right freight invoicing solutions for your company, that cost can be reduced by as much as 90%, or more when you factor in the savings of catching billing errors that would have been paid without audits.

Do you know of any other ways to help your company save on shipping costs? Please share them with others who are trying to identify ways to save in the comment section below.