April 20, 2022 •Deyman Doolittle
Before your company can learn from a parcel invoice audit, it’s important to understand what a shipping audit even is. What are the objectives of auditing your shipping invoices? How can this process save you money? And what is required to perform such an audit? Let’s address these questions.
What are 3 Types of Audits in Small Parcel Shipping?
If your business ships a lot of small parcels and/or documents, three high-level types of audits can support your success: parcel invoice audits, inventory audits, and workplace compliance audits.
Parcel Invoice Audit: In a parcel invoice audit, you or a third-party consultant like ShipSigma aggregate all the data from your shipping invoices for a set period. Our analysis using our Sigma platform can reveal if you are overpaying for parcel shipping due to additional fees, expensive last-mile logistics, or shipping contract terms that are not as competitive as others in your industry.
Inventory Audit: In an inventory audit, you or a third-party consultant determines if the inventory in stock on the shelves and in the supply chain matches what is documented on your asset sheets. The audit can also reveal if you are restocking on certain supplies or products too soon, or not early enough.
Workplace Compliance Audit: In a workplace compliance audit, you or a third-party consultant confirms if your warehouse and/or shipping facility are in alignment with safety and industry regulations. In the US, this could be an Occupational Safety and Health Administration (OSHA) audit or a Department of Transportation (DOT) audit for the shipping of hazardous materials.
What is the Purpose of an Audit in Logistics?
Within the three general shipping audit categories you might focus your audit more specifically on one type of parcel or inventory, or one workplace. That is determined by the purpose of your shipping audit. Common goals for an audit include:
- Managing cost overruns in the shipping budget
- Preventing stockouts of high-demand products and/or raw materials
- Focusing on employee safety and regulatory compliance
- Achieving new efficiencies in processes and procedures
- Understanding the data to negotiate better with shipping carriers and other parties
- Saving money without having to change vendors
- Better achievement of customer and/or shareholder expectations
Did you know that over 50 million parcels are shipped each day in the United States alone? Global shippers face even more volume and complexity, as shipping across the world’s 13 major markets grew 27% in the last year. Plus, 56% of shoppers aged 34 and under expect same-day deliveries.
What is the answer to this increased demand? For shipping carriers like UPS and FedEx, one early step has been to introduce increased additional surcharges to cover the growing cost of storage space, transport, and employee labor to get the parcels delivered.
If you aren’t auditing your shipping operations, you have no idea how well you are faring in this crowded and increasingly expensive space. A parcel invoice audit lets you ship with confidence that your costs are as low as possible, your risks are managed, and your business is thriving.
Shipping Audit Checklist: Choose ShipSigma
For high-volume shippers, manually analyzing every single shipping invoice is not possible. That’s why we created ShipSigma. We deliver our parcel invoice audit experience and shipping insights into the hands of businesses, starting with simple self-serve technology.
Our Sigma platform is a machine learning tool built to analyze your unique invoices and gain a complete understanding of your shipping footprint, cost modeling, and how both relate to your current agreement. Then, we help you innovate new ideas for cost savings while preserving the important elements like the carrier you want to work with and how you want your parcels to move.
Shipping insights and analytics don’t have to be a challenge to achieve and learn from. With ShipSigma, we guarantee you will receive knowledge that helps you save big instantly. Billing error refunds, carrier contract negotiation, and shipping optimization are just some of our strategies! Try ShipSigma for free and see what opportunities to save on shipping costs you could take advantage of, starting today.