As a business that relies heavily on small parcel shipping, your carrier contract is essential to your bottom line. As you probably already know, your carrier options are mostly limited to the duopoly of UPS and FedEx. This duopoly ensures that despite the relational equity, years of experience, and time and effort you leverage toward a contract negotiation, the carriers still have the upper hand. Even if they say you are getting the "best deal," you can be sure they are telling that to all of their customers. At ShipSigma, we are here to help you get your power, and money, back.
A parcel invoice audit is one of the best ways to save money and hold your carrier accountable. Performing an audit or using audit services can help you identify areas where your carrier came up short, like late deliveries, FedEx surcharges, damaged parcels, etc. In this blog, we look at FedEx small parcel audits in more depth, and suggest ways you can cut your shipping costs.
In simple terms, an audit is an official inspection of an organization's accounts, invoices, transactions, and billing to identify and remedy any inconsistencies. Conducting an audit of your own accounts, also known as an internal audit, is a great way to understand exactly what you are paying for and what quality of service you are receiving. We can break that down even more by looking at the purpose of an audit.
The ultimate goal of an audit is to save you money. There are a couple of ways an audit can do that, but it all boils down to understanding exactly what you are being charged for in every single transaction. Once you know that, you can identify where you were mischarged, or where the carrier failed to uphold their end of the agreement. Common examples include:
After you identify these discrepancies, you can bring them to the carrier's attention. In most cases, the carrier will offer you a refund for lapses in service. The only catch is you have to ask for one. Still, with the data from your audit, you might end up saving thousands of dollars just from carrier refunds alone.
Beyond just seeking refunds, audits also help you understand if the rate your carrier is charging is fair or overpriced. With the insights and data from a parcel audit combined with your strong negotiating skills, you can sit down at the negotiations table and work out a deal that's actually fair. You no longer have to rely on being told you have the "best deal," with an audit, you can know you do.
Now that we have covered the basic value of auditing, let's look at the three types of audits you can use.
The three types of audits you could use are: manual audits, parcel audit software, and parcel audit services. Each one comes with its own set of advantages and disadvantages. Let's take a quick look at the definition and pros and cons of each one.
Manual audits are exactly what they sound like… an employee going through all of the data manually.
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Parcel audit software automates the auditing process. The software automatically looks at all of your invoices, sorts them, and highlights areas of interest or concern.
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Parcel audit services essentially allow you to outsource your audit needs. You consult a team of experts and let them do the work for you.
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At ShipSigma, we understand the shipping industry inside and out. We know that you have years of experience negotiating deals with these carriers. However, you can negotiate an even better deal using the data we uncover throughout the parcel invoice audit process. Instead of guessing what a fair rate is, we can show you, down to the penny.
Auditing data is sensitive information, which means we have to earn your trust. Not only will you have access to our team of experts, you also will get the full advantage of our cutting-edge auditing software. We provide you with:
In fact, if we don't save you money, you won't pay a thing. So, if you're ready to cut your shipping costs by up to 25%, contact us today.
Parcel audit software automates the auditing process by scanning all carrier invoices, sorting them, and flagging areas of interest or concern. It produces a low error rate compared to manual review and provides a comprehensive view of all shipping data. Translating that data into refund claims and contract improvements still requires industry knowledge.
What types of billing errors does a FedEx audit uncover?A FedEx audit identifies service failures such as late, lost, damaged, or misdelivered shipments, as well as billing errors including duplicated fees, inaccurate weight or dimensional measurements, and improper rates. Each discrepancy category represents a potential refund claim or grounds for contract correction. Documenting these findings is the first step toward recovering overcharged amounts from the carrier.
Can FedEx refund shippers after an audit finds errors?FedEx does offer refunds for service lapses, but shippers must formally request them; the carrier does not issue credits automatically. Audit data provides the documentation needed to present each discrepancy to the carrier and initiate a claim. Businesses that submit refund requests based on audit findings have recovered thousands of dollars in previously uncontested charges.
How does a parcel audit improve carrier contract negotiations?Audit data reveals whether carrier rates are fair or overpriced, giving shippers precise invoice-level evidence to bring to the negotiating table. Shippers who enter negotiations with verified audit findings negotiate from actual performance data rather than the carrier's assurances. This replaces guesswork with documented facts and produces agreements that reflect verified shipping costs.
What are the disadvantages of doing a FedEx audit manually?Manual audits are prone to human error and depend on significant labor, which drives up costs when accounting for staff time and the expertise required. They are not efficient at scale, and converting raw invoice data into refund claims or rate corrections demands substantial industry knowledge. For businesses with high shipment volumes, the ongoing labor expense of manual auditing erodes the upfront cost savings compared to software.