Parcel Audits

Shipping is big business in the United States. In 2020, an estimated 20 billion parcels were shipped in the US, generating $171 billion in parcel revenue. With that many parcels on the line, it’s critical for high-volume shipping companies to understand how much they’re being charged by their carriers and why. Regular parcel invoice audits can provide companies with insight into what surcharges and fees shippers are being billed for. It reveals if they can save money by filing claims or if there are improvements that can be made to internal processes to avoid surcharges in the future. In this article, we’ll explore what kinds of points to look for in an audit and the types of parcel audits companies can perform.

What is an Audit in Shipping?

A parcel audit, otherwise referred to as a parcel invoice audit, is one the final steps of the shipping process. Parcel audits involve the regular inspection of shipping bills and invoices to identify overcharges, fees, or service failures on the part of shipping carriers like UPS or FedEx.

Businesses that regularly ship parcels or packages know just how complex—and expensive—shipping can be. Regular, thorough parcel audits can put money directly back into business’ pockets and can highlight inefficiencies that may be corrected or improved to save money in the long run.

What are some of the points that a UPS audit or a FedEx audit look for? The most common include:

• Late Deliveries: If a shipment arrives past its set or guaranteed delivery date you may be eligible to file a claim.
• Lost Shipments: Any time a shipment is lost you may be eligible to file a claim.
• Damaged Shipments: When a shipment is damaged you may be eligible to file a claim.
• Incorrect Charges: Surcharges may be applied incorrectly, such as residential fee surcharges for commercial address deliveries.
• Duplicate Charges: Any time you are charged more than once for a single shipment should be refunded.
• Address Corrections: If an address is entered incorrectly, you may be hit with a surcharge if FedEx or UPS needs to edit it. Address correction surcharges may be applied incorrectly, however, so they should be reviewed for accuracy. Businesses should update customer address information to avoid address correction fees in the future.
• Dimensional Weight Charges: If the carrier uses incorrect weight or dimensional information, you may incur incorrect surcharge fees.

Small Parcel Audit: Enhancing Cost Efficiency for High-Volume Shippers

For high-volume shipping companies, the complexities of logistics often mask hidden costs. A Small Parcel Audit is an essential process for identifying and mitigating these costs. By scrutinizing every aspect of parcel shipping invoices, companies can unveil discrepancies and inefficiencies that might otherwise go unnoticed.

The Importance of Small Parcel Audits

With millions of parcels dispatched daily, even minor errors or unnoticed fees can accumulate into substantial losses. Conducting a Small Parcel Audit enables companies to:

• Identify billing errors such as incorrect surcharges or duplicate charges.
• Monitor carrier performance and ensure compliance with service agreements.
• File claims for service failures like late deliveries or lost shipments.
• Optimize shipping strategies by analyzing audit data.

Regular audits not only safeguard against unnecessary costs but also provide critical insights for enhancing operational efficiency.

Key Areas of Focus in Small Parcel Audits

Conducting a thorough audit demands meticulous attention to several key areas:

• Late Deliveries: Validate that delivery times adhere to the service level agreements. Claims can be filed for delayed shipments.
• Lost Shipments: Track parcels that fail to reach their destination, ensuring claims are filed for losses.
• Damaged Shipments: Inspect packages for damage incurred during transit and claim compensation accordingly.
• Incorrect Charges: Verify that all surcharges applied (e.g., residential delivery fees) are valid and correctly attributed.
• Duplicate Charges: Ensure that each parcel is billed correctly without redundant fees.
• Address Corrections: Confirm the accuracy of address changes to avoid unwarranted surcharges. Update customer shipping information to minimize future errors.
• Dimensional Weight Charges: Check for accurate weight and dimensional calculations to avoid erroneous fees.

Attention to these areas can deliver significant cost savings and improve the overall shipping process.

Choosing the Right Audit Method

For high-volume shippers, choosing the appropriate audit method is crucial. While manual audits are feasible for smaller operations, they can become unmanageable as shipping volumes increase. Implementing parcel audit software or partnering with third-party providers can offer scalable solutions that save time and enhance accuracy.

At ShipSigma, we take Small Parcel Audits to the next level. Our AI-powered platform rigorously examines invoices, executes a comprehensive audit, and autonomously files claims. By delivering actionable insights, we empower businesses to gain control over their shipping expenses and boost efficiency.

What Are the Types of Audit for Shipping?

Companies that perform regular parcel invoice audits save money—that’s all there is to it. What is the best way to perform audits? Generally speaking, there are three types of parcel audits that companies can perform: doing manual audits, using audit software, or partnering with a dedicated parcel audit services company.

Manual Audit

A manual parcel audit relies on an individual performing a parcel audit by reviewing each bill or invoice for overcharges, service failures, or common fees and surcharges that may have been added erroneously. Manual auditing may work for companies that ship a small number of parcels each month. However, manual auditing can quickly become overwhelming and ineffective for companies that ship a large number of parcels, and it may not be the best use of employee time.

Parcel Audit Software

A step up from manual auditing, some businesses choose to purchase a subscription to dedicated parcel audit software. Using a software platform can certainly help businesses more accurately and efficiently review their carrier invoices. However, parcel audit software does require significant work to get it fully integrated into your workflows. Beyond that, businesses must still dedicate time and effort into making sure everything is entered correctly and working as expected to get the most out of their software subscription.

Third-Party Parcel Audit Services

Finally, businesses may consider finding a third-party parcel audit service to partner with. Parcel audit companies take the work of invoice auditing off of a business’ hands entirely with highly-intelligent solutions to auditing. As a shipping consulting partner, ShipSigma provides an AI-powered platform that can scan weekly carrier invoices, perform a 50+ point audit, and automatically file claims to save businesses money. Additionally, companies receive actionable insights that can allow you to boost efficiencies internally and with your carrier.

ShipSigma: Saving High-Volume Shipping Businesses Money

At ShipSigma, we’re dedicated to helping shipping companies reduce shipping costs and save money. Our industry-leading transportation spend management technology produces enterprise-level solutions, including parcel invoice audits, carrier contract negotiations, and shipping insights and analytics. With an average savings of as much as 25%, our services truly make an impact on your bottom line.

Ready to start saving today? Reach out to our team and try it free today.