Invoice auditing that is worthwhile must be more than a quick glance and a sign off when it comes to processing large quantities of money. But, accountants and finance team personnel have a lot on their plates and invoice auditing doesn’t always get the attention it deserves. Manual invoice auditing takes a toll on the time of accountants, money spent on efforts, and even then, does not guarantee an accurate invoice after the auditing session.
Shipping is a complex practice with many moving parts. Paperwork errors slip through the cracks, shipments are delayed, organization or vendor/company relationships become fragile, and invoices are quickly paid without being reviewed. These issues are not unique. In fact, many large companies are starting to realize that the implementation of digital accounting and auditing tools will help take the pressure off and allow them to focus on issues that need the care and attention of humans.
Automated invoice auditing is the golden ticket for freight and logistics companies (or really any companies) who handle hundreds to thousands of vendor invoices each month. Automated invoicing technology not only accurately audits invoices and can save companies thousands of dollars in accidental over charges, but also frees up your team to spend their energy on more important tasks.
Below are the top six things automated freight invoice auditing technology checks for. How much could your company save if these questions were asked for each individual vendor invoice?
- Was the proper classification applied and charged? The National Motor Freight Association (NMFA) publishes an annual classification guide, which groups all commodities into one of eight classes, ranging from 50 to 500. Such classes have different freight rates and are based on four different factors including density, storability, handling, and liability.
- Did the logistics company add accessorial fees? If you were charged accessorial fees, were you at fault? If you were at fault, are there steps you could take in the future to prevent such fees? Were you charged for fees you had negotiated away previously?
- Are there duplicate invoices? You might be surprised to discover that duplicate invoices and the double charging of shipments is a common error that can be sniffed out during freight invoice auditing. In most cases, this is accidentally done by the carrier for reasons including a lack of control in accounts payable, or having multiple means for accepting or paying invoices. While shady carriers do exist, it is better to give them the benefit of the doubt should this issue arise and assume it is simply an invoicing error on their end.
- Did the carrier apply your discounts? You may have previously made arrangements or deals with your carrier about potential discounts. If you have agreed with your carrier on discounts, be sure to check that they are appropriately applied. Further, if the carrier made a late delivery, this may reduce, if not negate, the cost of shipment. If there is a late or damaged delivery, be sure to note that immediately on the bill of lading.
- Was the mileage and zip code correct? The further a carrier has to carry a package, the higher the cost will typically be, especially if the carrier has to go off-route or the package needs to be transferred to different trucks. It is important to be sure your shipment was correctly labeled to avoid unnecessary travel and expenses of the shipment.
- Does the math add up? After verifying that charges are correctly applied, it is essential that you make sure the numbers add up. Calculation errors occur on both sides, so double-checking your work is a wise way of making sure that you are not paying more than you should be.
With OpenEnvoy, every vendor invoice is audited in a quick and accurate fashion with these six questions in mind. With real time automated auditing technology, companies are alerted of discrepancies between invoices and contracts and are guided through the steps of fixing presented errors, thus saving the time it would take to manually find discrepancies and go through the process of contacting vendors, and the money of blindly paying for duplicate billings, excess charges, and instances of vendor fraud.
By investing in OpenEnvoy, you put another layer of control in your system and process to protect your company and its financial assets. Explore how OpenEnvoy can help your team reap the benefits of saving time and money through automating invoice auditing. Checkout futurefinops.wpengine.com and make sure to connect with an expert.