Understanding the Freight Audit Process


For any service provider or carrier in the trucking industry, understanding the freight audit process is essential. This process directly affects profitability by controlling freight costs and freight payment verification, ensuring freight rates are in line with industry benchmarks. In a freight audit, the shipper reviews all freight invoices and freight bills to check for discrepancies or overcharges and validates accessorial charges for accuracy. Automation is often a key component in modern audits, helping streamline this complex process.

 

What is a Freight Audit

A freight audit is a detailed examination of carrier invoices and freight bills to manage transportation costs and maintain accurate freight payment records. It ensures shippers aren’t overpaying or facing unexpected surcharges. The shipper’s freight audit process includes reviewing the freight invoice, noting any discrepancies, and confirming that all accessorial charges match industry standards.

Beyond financials, a freight audit checks delivery timelines, load conditions, and shipment locations. The validation of each freight invoice against business rules ensures that invoices align with TMS (Transportation Management Systems) standards and company KPIs. By analyzing freight spend data, shippers can achieve better cost allocation and optimize their logistics.

Why is a Freight Audit Important? 

Performing a freight audit provides numerous benefits that support a shipper’s supply chain and logistics operations:

  • Cost Savings: Identifying inaccuracies in freight bills or overcharges enhances profitability.
  • Billing Accuracy: Ensures carrier payments match the agreed freight rates and accessorial charges.
  • Operational Efficiencies: Automation reduces time spent on invoice processing and improves accuracy.
  • Data-Driven Decision-Making: Insights from audits inform business decisions and support rate management.
  • Competitive Advantage: A streamlined audit program provides cost control and improves transportation spend metrics.

 

Freight Audit Process Options 

 

The freight audit process can vary based on company resources, budgets, and goals. Shippers generally select from three main types:

 

Manual Freight Audit Process 

 

In a manual audit, freight invoices are reviewed by staff, making this method labor-intensive and prone to inaccuracies. While a low-cost option, manual audits lack the precision of automation and are often harder to benchmark against industry standards, which could affect competitive advantage.

 

Automated Freight Audit Process 

 

Automated audits use business intelligence tools to analyze freight bills and flag discrepancies. This approach improves profitability by reducing human error and expediting the payment process. With real-time data integration, automation enhances optimization of rate management and budgets while improving carrier performance. Many shippers use ERP-integrated dashboards to simplify decision-making.

 

Combination Freight Audit Process 

This method combines automation with manual review, where freight carriers’ flagged invoices are routed to staff for further analysis. This hybrid approach ensures that discrepancies receive human oversight and offers flexibility for adjusting business decisions. Combining methods also supports competitive advantage by maintaining accuracy and streamlining the freight audit process.

 

Freight Audit Checklist 

A detailed checklist supports a thorough freight audit process, aligning payment services and carrier rates with industry benchmarks:

  • Gather detailed invoices from carriers.
  • Define the audit’s scope and establish a timeline.
  • Organize invoices and validate all rate management documentation.
  • Cross-verify zones and postcode files with rate confirmations.
  • Develop a manifest of field data and confirm consignment details.
  • Compile and negotiate credits with service providers for discrepancies.

Following these steps supports consistent and reliable auditing practices, enhancing profitability and reinforcing sound decision-making.

 

Should You Outsource Your Freight Audit

 

Outsourcing a freight audit to a third-party service provider can be advantageous for companies focusing on maintaining competitive advantage and efficient budget allocation. An external audit team offers expertise in rate management and often provides more consistent benchmark comparisons. For some shippers, managing audits in-house is more effective, as an internal team can be trained to meet the company’s unique standards. However, if dedicated internal roles are too costly, outsourcing to a specialized payment services provider may offer a more practical solution.

Our dedicated team of trucking experts are here to help. Give us a call today if you have more questions on the shipper freight invoice audit. 913-393-6110