How To Simplify The Freight Bill Reconciliation ProcessWritten by Paul Forand
If you aren't taking control of your freight billing, chances are good that your company is losing money. Possibly a lot of money.
Few companies keep tabs on their shipping charges, especially those that leave procurement and distribution to individual departments. In even a midsized company, there could be hundreds of invoices generated. If they're being folded into the department's overall budget, those invoices might as well be invisible from a company-wide budgeting standpoint.
So how can a company ever know if they're getting good freight rates? Or whether they have been paying additional fees? Or even if the freight charges being paid were accurate?
As a company grows, the need to centralize freight billing also becomes more important. Freight is one of the most controllable costs within a business, and significant savings can be had with central billing and shipment tracking.
Getting A Handle On Freight Bill Reconciliation
For smaller companies, it's sometimes plausible to reconcile freight bills manually, but it likely requires a dedicated employee in your accounting office. Largely, they'll be concerned with three things:
- Do the initial quotes match the final amount paid?
- Were any unexpected charges/fees added during shipment?
- Are you only being charged for what you shipped?
Matching up a freight bill to the initial quote can be especially problematic. Many companies without electronic systems are still producing quotes based on estimated charges, or even guesstimating it as a percentage of the sales price.
Obviously, such methods could lead to wildly inaccurate quotes, and surprises on practically every final bill... if anyone is watching for them.
This employee would also need empowerment to deal with the freight companies involved, should any discrepancies appear. The issue of fees can be particularly contentious, besides being an unpleasant surprise on the bill.
Some unreliable providers may attempt to skirt regulations by under-estimating the cost of shipping items in order to provide lower initial quotes. Since they're contractually guaranteed a percentage of the final shipment costs, they have very little incentive to prevent such errors. The additional fees you might be required to pay are added onto their percentage!
In turn, the best way to prevent these discrepancies in charges is to obtain accurate information on the product and the delivery requirements before quoting. And, if there are discrepancies, having the ability to track shipments in the same way parcel shipments are tracked could help identify where the error(s) occurred.
Of course, it's at the carrier's discretion to provide you with detailed tracking information.
If this seems like a lot of work... well, it is. That’s why many businesses will allow for errors in their freight budget because it seems too difficult to reconcile the billing.
However, there is an alternative that can quickly streamline your entire shipping operation.
How ReTrans Freight Makes Freight Reconciliation Simple
Unlike most 3PLs, ReTrans is not merely a broker taking a percentage. We combine the collective volume of all our clients to leverage committed capacity in addition to better rates than you’d get from ad-hoc shipment brokering.
We can do this because we already have decades-long relationships with the top carriers in the nation, and we have access to information about our shipments at our fingertips. We pass this on to you, along with the savings incurred. We don't give guesstimates - our quotes come straight from the carriers and are available directly to you as well. We can track a shipment every step of the way, and you're free to monitor it through our online tools.
After the final bill comes in, our auditing system checks the entire paper trail for any discrepancies, and verifies the accuracy of every bill paid. Should there be an inconsistency, it's fully documented and submitted for further review.
This closed-loop billing allows us to provide our clients with unparalleled oversight and control over their entire shipping operation.
ReTrans Freight can help you overhaul your freight billing processes quickly and efficiently, while providing you with total access to information in one centralized place through our online web portal. To learn more, or to see our case studies, just contact ReTrans Freight for more information.