The 2024 Guide to Freight Recovery Audits

Reviewed by Ben Evans, CPA, CCA, and President of Auditec Solutions.

Maximizing Profitability Through Freight Recovery Audits: Why Your Business Needs It

In today’s highly competitive and cost-sensitive market, businesses are under constant pressure to maximize profits while minimizing operational costs. One area that often gets overlooked is freight management. Shipping costs can account for a substantial portion of a company’s budget, and over time, small discrepancies in billing, invoicing errors, or missed refund opportunities can add up to significant losses. This is where freight recovery audit services come into play.

Errors in freight billing happen more frequently than most businesses realize. Some examples include carriers inadvertently charging for incorrect weights, dimensions, pallet quantities, mileage errors, loading or unloading fees, applying the wrong rates, and many other billing errors. Freight recovery audits help reclaim these lost funds, ensuring that your company only pays for the services it actually receives.

Why Freight Recovery Audits Matter

Cost Savings: The most immediate benefit of a freight audit is cost recovery. Recovering funds from overpayments or missed refunds can directly impact your bottom line, providing an opportunity for significant savings.

Improved Contract Negotiations: A thorough audit can reveal insights about your shipping costs, helping you renegotiate contracts with carriers for better rates, extra fee reduction, and improved tracking of future shipments for cost verification. This leverage can significantly reduce long-term transportation costs.

Regulatory Compliance: Freight recovery audits also ensure that your company remains compliant with all regulatory requirements, avoiding potential fines or penalties for mismanagement of shipping and transportation documentation.

Data-Driven Decision Making: With access to accurate, granular shipping data, you can make informed decisions about which carriers, lanes, and shipping methods work best for your business. This allows you to optimize logistics strategies based on real-world performance metrics rather than assumptions or outdated practices.

How Does Freight Recovery Audit Work?

The process typically starts with a comprehensive data collection from the company’s shipment history, invoices, contracts, and carrier agreements. Using advanced software tools, Auditec analyzes the data, looking for inconsistencies or errors in billing. They may also examine things like:

• Incorrect fuel surcharges
• Duplicate payments
• Classification and weight discrepancies
• Incorrect pallet or package charges
• Failure to consolidate fines
• Freight type
• Late delivery refunds
• Accessorial charges

Once errors are identified, the freight recovery audit team works with carriers to secure refunds or credits for the discrepancies. These corrections can be applied to future invoices or refunded directly to your business.

Why Partner With a Freight Recovery Audit Company?

While some businesses may attempt to perform freight audits in-house, the process can be time-consuming and requires a deep understanding of both logistics and freight billing practices. Partnering with a professional freight recovery audit service provider offers several advantages:

Expertise: Freight recovery specialists have extensive experience working with carriers and possess the knowledge needed to navigate complex shipping contracts and billing practices.

Advanced Technology: Audit companies utilize state-of-the-art software designed to quickly identify billing discrepancies, flag potential issues, and streamline the recovery process.

Focus on Core Competencies: Outsourcing freight audits allows your in-house teams to focus on your core business activities, without getting bogged down by the intricacies of freight management.

Ongoing Monitoring: Auditec offers continuous monitoring of shipping invoices, ensuring that errors are caught in near real-time, and cost savings are maximized on an ongoing basis.

The Long-Term Impact of Freight Audits

Beyond immediate cost recovery, freight audits deliver lasting benefits. They give businesses the insights needed to refine logistics strategies and reduce future shipping expenses. Over time, this creates a leaner, more efficient operation that maximizes profitability by eliminating wasteful spending on shipping errors and inefficiencies.

Conclusion

If your company is managing high volumes of shipments or regularly dealing with complex logistics operations, freight recovery audit services are an essential tool for maintaining financial health. By identifying overcharges, reclaiming lost funds, and optimizing shipping operations, freight audits provide both immediate savings and long-term improvements in your logistics strategy. Investing in a freight recovery audit isn’t just about recovering lost dollars—it’s about future-proofing your business against unnecessary costs and enhancing your overall bottom line.