Parcel Audit Software
Over the last several years, shipping rates have increased while the shipping industry in general has become more complicated due to the global pandemic, supply chain issues, and labor shortages. As a result, your business is likely the one paying for it. Whether that is through increased prices for parcels or freight, or in receiving diminished service at a similar cost, you could be leaving money on the table when it comes to your shipping strategy. The best way to figure out how exactly, is to conduct a freight or parcel invoice audit.
What Is a Parcel Audit and Why Is It Important?
The goal of a parcel audit or parcel invoice audit is to lower your shipping costs. To do so, your company reviews the shipping invoices, bills, and transactions extensively to try and identify any discrepancies, or instances of overcharging. It entails more than just parcel shipping tracking or a partial audit. By conducting a complete audit, you essentially catch any errors made in your invoices, as well as mistakes made by the carrier.
Then, with the information you find out by conducting the audit, you are able to devise a strategy to lower your shipping costs upfront. Perhaps even more important than the upfront savings are the insights you gain from your auditing process. During your audit, you can identify any shortcomings, such as a carrier failing to deliver on time or parcels lost in transit.
This information can be extremely valuable for a couple of reasons:
- First and foremost, most carriers will offer a refund…if you ask for one. While there is always an exception, in general, carriers are more than willing to make things right. Whether this is a result of late arrivals, lost or damaged packages, or an inaccurate bill, carriers recognize when they’ve failed to meet their end of the bargain. You just have to bring it to their attention first. The best way to do that is through your audit.
- They provide shipping insights and analytics on things like the distance traveled and the varying levels of commitment for service delivery. With data like this, you can understand clearly where and how your carriers are over-performing, and more importantly where they are falling short.
How Do You Do a Parcel Audit?
Now that we’ve established the importance of a parcel audit, it’s critical to understand the objectives and different methods of auditing.
Objectives of Parcel Auditing
When conducting a parcel audit of any sort, it is important to understand the main objectives or goals of it. In other words, know what you are looking for before you dive into the data. Some of the main things you will want to find are:
- Late deliveries
- Lost shipments
- Unnecessary rate increases
- Damaged shipments
- Incorrect charges
- Duplicate charges
- Incorrect addresses or locations
- Inaccurate weight or dimension charges
- Incorrect rates applied by the carrier
Parcel Auditing Methods
Generally speaking, there are three methods of commonly used small parcel audits in the USA. They are:
- Manual auditing which consists of you or a staff member going through all of your invoices and information by hand. The thing is, if you have thousands of small parcels to audit it can be overwhelming and incredibly time consuming. While this may seem like an easy and cost-effective option, the reality is that with all the time someone is spending on auditing, it may cost more than it’s worth in the long run. Similarly, as with anything done manually, there is always a risk of human error. When it comes to auditing, that risk could turn into thousands of dollars.
- Parcel audit software which helps automate and manage all the information required to perform an audit. With this option, you are purchasing a software license that will help you keep track of parcel invoices, payment, transactions, and other relevant data. While this process is probably going to be more expensive upfront than a manual audit, it is easier to do, more accurate, and provides results more quickly. The only other hang up with using parcel auditing software alone is that you will likely need some know-how and shipping industry experience to put the data to use.
- Third-party auditing services are also available, which combine auditing software with experts in the field. You can think of this as a form of parcel consulting when it comes to auditing. A good partner or service provider will not only have access to parcel auditing software, but will be able to optimize how they use it on your behalf. For example, with ShipSigma, all you have to do is give us permission to look at your data and we can unlock insights you never realized you had.
Parcel Auditing Software in More Detail
In both points 2 and 3 above, we discussed parcel auditing software, but what does that software really do? To give you a better idea, we will walk you through exactly what our platform at ShipSigma does. In short, our software gives you the power to cut parcel shipping costs without lifting a finger. Our audit and reporting platform automatically identifies any and all invalid charges using the power of AI and Machine Learning. Within that you are provided with:
- Reduced costs of every shipment
- Instant savings
- Fully automated invoice auditing
- Weekly invoicing audits of UPS and FedEx
- 50+ audit points ensuring contract compliance
- Generate and file claims automatically
The true heart of what a good parcel auditing software gives you is three things… your time, your money and your data like you’ve never seen it before.
Parcel Audit Checklist
Regardless of the type of audit method you use, in addition to understanding the “why” of your audit, you will also want to ensure you are taking all of the necessary steps. For example, at ShipSigma, we use the following process:
- Collect invoices - This is the raw data that informs the rest of the audit.
- Organize expenses - Once we have the invoices, it’s time to break your expenses into categories. Usually this includes organizing the data by carrier and sorting in chronological order to get a holistic sense of the invoice data.
- Set benchmarks - Our software sorts through the invoices and we start to analyze the data. We automatically establish benchmarks throughout the process to accurately detail where and how your money is being spent.
- Data analysis - Our system does a complete analysis of your data and determines where mistakes occurred (or are still occurring) and how much they are costing you.
- Review your rate - Once all the data has been organized and analyzed, we can answer the big question of whether you are being charged the correct rate. Not only can we give a yes or no answer to this, but we can quantify exactly how far off your rate is from what you should be charged.
Discovering you are being charged a high rate is important to know, but what can you do with that information? You want to get a better deal, but how? Can contracts be negotiated? While the carriers will tell you that your contracts aren’t negotiable or that you are already getting the best price, the truth is neither of those statements are true.
If everyone is getting the best price, then no one is. As for contract negotiations, let’s dive into those a little more in depth.
Parcel Contract Negotiation
Aside from getting refunds for lapses in service, that data you get from parcel audits can help you save money when it comes time to negotiate your shipping contract. Usually, when it comes to parcel shipping there is a duopoly, UPS or FedEx. Oftentimes when you are trying to negotiate the best deal you are going back and forth between the two carriers, trying to leverage your experience and relational equity. The truth is though, the carriers are the ones with all the leverage. That is, they used to be.
Imagine sitting down at the carrier contract negotiation table armed with data and insights about your shipping costs in a way you have never seen before. Imagine being able to go line by line and see exactly where you are getting overcharged. With parcel auditing processes and software you are able to do just that.
With ShipSigma, You Can…
With ShipSigma’s software, processes, and service, we can guarantee you a better deal, and if we can’t you don’t pay a cent. You can trust our team of experienced shipping experts. In fact, some of us even used to negotiate contracts on behalf of carriers ourselves. The point is, with your expertise, our data, and the partnership we can form, you will be able to negotiate a shipping deal your whole company will praise.
Aside from our AI-powered software and our auditing checklist, we also provide step-by-step assistance in other ways. Our services also include:
- Live and continuous audit providing real time updates and alerts
- Operational support as our team acts as an extension of yours to optimize day-to-day operations
- A team dedicated to your success
- Shipment tracking and tracing
- Carrier payment in the form of one consolidated payment every week instead of multiple smaller checks
- Monthly accrual for any shipments you haven’t been billed for previously
In the end, at ShipSigma we are here to serve you and save you money. You have the expertise to negotiate a good deal. You just need our data insights to negotiate a great one. We’re confident that you will start seeing meaningful results within the first month of use. Contact us today to get started.
