Freight audit

Definition of Freight Audit

A freight audit involves the comprehensive examination of freight bills to verify their accuracy against quoted rates and contractual terms. The goal is to identify billing errors—such as incorrect classifications, duplicate charges, or accessorial fees that were not agreed upon—and recover overpayments. This process is crucial for maintaining a healthy bottom line in logistics operations.

Key Features of a Freight Audit

Managing a high volume of shipping invoices can be chaotic. A structured freight audit process brings order to this chaos through several key mechanisms:

Invoice Validation

The core of the process is verifying that every line item on an invoice matches the service performed and the price agreed upon. This includes checking fuel surcharges, taxes, and weight calculations.

Discrepancy Identification

Audits are designed to catch errors that often slip through manual checks. This includes flagging overcharges, spotting duplicate invoices for the same shipment, or identifying billing inconsistencies where the carrier applied the wrong tariff.

Data Management

Beyond just checking prices, a freight audit organizes transport and freight information. It creates a centralized record of shipping activities, which is essential for accurate financial reporting and future negotiations.

Cost Optimisation

By ensuring businesses pay only what is necessary, freight audits directly contribute to cost optimization. It stops revenue leakage and ensures that the freight spend aligns with the budget.

How it Helps Businesses

Implementing a robust freight audit system offers benefits that extend far beyond simple error correction.

Significant Cost Savings

The most immediate impact is on the bottom line. By identifying and eliminating overcharges, businesses can significantly reduce their overall transportation costs. It is estimated that a substantial percentage of freight bills contain errors favoring the carrier; catching these ensures you keep your hard-earned money.

Improved Compliance

Freight audits ensure adherence to contractual agreements and regulatory standards. It holds carriers accountable to the terms signed in the contract, ensuring that the payment process follows the rules established by both parties.

Data-Driven Decisions

The data collected during audits provides valuable insights into shipping costs and patterns. Logistics managers can use this intelligence to optimize logistics operations, negotiate better rates based on actual volume and lane data, and make informed strategic decisions.

Time Efficiency

Modern freight audit solutions often automate the invoice checking process. This automation frees up valuable internal resources, allowing your team to focus on higher-value tasks rather than drowning in paperwork.

How Geo2 Approaches Freight Audits

Geo2 is designed to simplify freight audits by enhancing the process when used alongside other tools or methods. Its features, such as delivery tracking and data recording, streamline freight operations, making it easier for logistics managers to collect and organize the necessary information for efficient audits.

Geo2 speaks like a street-smart teammate—someone who's been on the road, understands the grind, and is here to make life easier, not harder. We balance practicality with encouragement, and we’re always on the side of the driver or team trying to do a great job in a tough world.

By providing accurate data on routes, delivery times, and vehicle usage, Geo2 acts as a source of truth that can be cross-referenced against carrier invoices. This transparency helps in maintaining a healthy carrier relationship, as disputes can be resolved quickly with hard data.