A parcel audit is the process of reviewing parcel invoices for billing errors or other mistakes that cost your business money. The goal of parcel audits is to recover excess spending and ensure the correct shipping terms are being provided.
Are excessive shipping charges silently siphoning your profits?
Accurate shipping expense tracking helps ensure you’re getting what you pay for from your parcel carriers. With parcel audit services, you can detect and recover any excess fees, ensuring every expense is justified and your deliveries are as expected.
Keep reading to learn how effective parcel auditing strategies unlock savings, reduce spending, and improve shipping logistics to enhance your company’s bottom line.
Key Takeaways
- Parcel auditing saves your business money by claiming refunds for invoice discrepancies, providing insights into inefficiencies, and generating data to help you negotiate with carriers.
- Parcel auditing software streamlines error detection by scanning shipping invoices and bills, detecting discrepancies, and correcting them to help optimize shipping operations and reduce shipping costs.
- Comprehensive parcel audits arm your businesses with essential data to improve contract negotiations with carriers, reclaim funds from billing errors, and enhance overall supply chain efficiency.
What Is A Parcel Audit?
Parcel auditing is the process of reviewing and analyzing carrier invoices for billing discrepancies. You’ll look for overcharges, duplicate charges, service failures that are eligible for refunds, and incorrect information about parcels or shipping processes.
These insights can help you find refunds you’re entitled to so you can minimize your shipping spending and unveil data and trends you can use to inform your operations.
Why Should You Conduct Parcel Audits?
Parcel auditing drives cost-effectiveness, customer satisfaction, and operational efficiency, helping to streamline shipping without hurting service quality.
Here’s how.
Save Money
The primary benefit of small parcel audits is the ability to lower costs and recover overspending due to billing errors, incorrect rates, or invalid charges.
When you carefully review each item in a parcel invoice, you can make sure you’re being charged the appropriate shipping rate and there are no human errors like duplicate charges added by mistake.
You can also verify any additional service charges, like storage fees or other accessorial charges, to ensure you’re only paying for necessary services.
If there are mistakes, you can take the steps required to recover those funds as outlined in your parcel carrier agreement.
In the end, regular parcel auditing improves your cost efficiency, helping you save up to 15% of your business’s total shipping expenses.
Ensure Service Quality
In addition to saving you money, parcel audits also help ensure you and your customers are receiving the services you pay for.
You can check that the package was delivered on-time and in good condition. If it wasn’t, you can use this information to collect a refund or as leverage during your next carrier contract negotiation to help lower rates.
With parcel audits, you can maintain high quality standards and grow customer satisfaction through consistent service quality.
What Does The Parcel Auditing Process Look Like?
Parcel audits are pretty straightforward, but there’s a lot to consider at each step.
The general parcel auditing process includes:
- Collecting shipping invoices and entering their data into your audit software.
- Reviewing the invoice for errors, overcharges, and inefficiencies.
- Negotiating with carriers to recover money.
You can choose to conduct parcel audits manually, with the help of parcel auditing software, or with a third-party provider.
What Should You Review During A Parcel Audit?
Parcel audits require you to take a comprehensive look into all elements of your parcel invoices.
During a small parcel audit, you should check:
- Parcel Information: Ensure your packages were weighed and measured correctly to avoid being charged for larger or heavier packages.
- Service Levels: Check the shipping type and speed to ensure it’s what was previously agreed upon, and that it was fulfilled.
- Shipping Charges: Make sure you’re being charged the correct rates, according to your carrier agreement.
- Additional Charges: Verify surcharges for variable fuel costs, special handling charges, and accessorial fees to ensure they’re reasonable and within agreed-upon terms.
- Discounts: Confirm that you’ve received any discounts that you’re entitled to, including volume discounts.
These checks ensure that carriers are adhering to your agreement and you’re only paying for the services you receive, helping you lower your spending.
What Factors Impact Pricing?
Parcel audits may seem simple in practice, but they can get complicated quickly–especially when there are a variety of costs you need to account for.
Total shipping costs depend on a lot of different factors, including some that you won’t know about until after delivery is complete.
Here are a few billing elements that will impact your invoice totals.
Service Failures
If the level of service you receive doesn’t match your carrier agreement or you don’t receive the type of delivery you pay for, it’s a service error.
Examples of parcel carrier service failures include:
- Missed pick-up times
- Late deliveries
- Damaged packages
- Delivering to the wrong address
- Failing to collect a signature upon delivery
These service failures can both cost you money and hurt customer satisfaction, making it crucial you identify and address them with your carriers–which usually includes refunds.
Accessorial Fees
Accessorial fees are charges that result from services that exceed standard pickup and delivery.
Some examples include:
- Home delivery
- Loading or unloading charges
- Additional equipment required for shipping or delivery
- Parcel storage
- Hazardous material considerations
- Re-delivery not caused by the carrier
Ensure these added services are necessary, charged correctly, and performed as outlined in the parcel carrier agreement.
You can also look for trends of recurring accessorial fees and consider negotiating lower rates or including them as part of your carrier agreement in the future.
How Do You Recover Refunds from Carriers?
The recovery process is where you can reclaim any funds lost to billing errors, overcharges, and incorrect fees. It’s incredibly important to your bottom line, but it’s not a simple process.
You need to adhere to the carrier’s refund conditions, complete necessary documentation, and adhere to tight timeframes to make your claim for a refund.
You’ll also have to validate invoices, collect applicable data to prove the errors were made, and negotiate with carriers using your data to receive your refund.
Luckily, with software like Zero Down for freight and parcel audits, it’s easy to identify these errors, organize the data reflecting them, and use it to streamline the recovery process and give your business more negotiating power.
Why Should You Use Automated Parcel Auditing Software?
Parcel invoice audits may seem like a major investment because of the process’s complexity—and if you don’t use the right software, it can be.
The process of manually poring over every parcel invoice to verify shipping expenses can be both tedious and inconsistent. Plus, it may even lead to more wasteful spending and costly mistakes.
How Parcel Audit Software Helps You Audit
The goal of parcel invoice auditing is to save you time and lower your overall shipping costs by reducing wasted spending.
With parcel audit software, you can:
- Automatically detect errors with higher accuracy than manual audits
- Use machine learning to identify spending trends like common accessorial fees you can use to make changes
- Review shipping contracts to ensure you’re receiving the service you’re expecting
With automated parcel audit services, you’ll be able to optimize shipping operations and uncover savings to help your business save money.
Auditing the Auditor: The Importance of The Right Parcel Auditing Solution
When it comes to recovering your unnecessary shipping spend, not all auditors are equal.
A client of Zero Down had done $8.5 billion in revenue, but their previous two auditors were unable to identify any opportunities for parcel refunds.
However, after using Zero Down’s advanced logistics platform, FreightOptics™, they were able to recover over $300,000. This effort included reopening claims that were rejected previously and having them overturned for a refund.
Commit to an Effective Shipping Audit Process
It’s clear that parcel audits can make your business more efficient without impacting your service quality. Through in-depth evaluations of your parcel and shipping invoices using audit software, you can both recover unnecessary spending and identify ways to optimize your shipping strategies.
Don’t let billing errors cut into your bottom line. Invest in the right tools and leverage parcel auditing to drive operational efficiency, accuracy, and profitability for your business.
Frequently Asked Questions
What is a parcel audit?
A parcel audit is the process of reviewing parcel carrier invoices for billing errors or overcharging to avoid unnecessary spending. You’ll also use them to recover overpayments from parcel carriers.
What is an audit in shipping?
An audit in shipping involves reviewing parcel invoices to identify mistakes and discrepancies that may be costing you money unnecessarily.
How do you audit a courier?
You can audit parcel carriers by conducting a parcel invoice audit where you identify billing errors, ensure contract compliance, and process any claims that you or your auditing software identify.
Does parcel auditing slow deliveries?
It’s a myth that parcel auditing slows down your shipping processes and delays deliveries. Audits take place after shipments have been completed and are a separate administrative process from the shipping process itself.
How much can a business save through parcel auditing?
Regular parcel auditing, especially when completed with auditing software, can save your business as much as 15% of your total shipping spend.
Does parcel audit software replace the need for manual audits?
Parcel audit software can significantly increase the efficiency and accuracy of audits, but some businesses may still choose to use a combination of both automated and manual parcel auditing for an extra layer of certainty.
