Today’s ultra-competitive business environment dictates that freight shipping costs can have a significant impact on a company’s bottom line. For many businesses using UPS Freight services, managing these costs goes beyond negotiating carrier contracts – it requires a robust UPS Freight Audit Management process. Let’s explore what this process entails, why it’s crucial, and how to set it up for consistent success.
UPS Freight Audit Management is the systematic review and validation of freight invoices from UPS Freight (now known as TForce Freight, following UPS’s sale of its freight division in 2021), which ensures that the charges billed by the carrier align with the services provided and the terms of the agreement.
Some of the key elements of this process include a sounder process for invoice verification, including checking billed charges against rate agreements, shipment details and actual delivery data.
Error identification is also more easily facilitated, as the process makes spotting discrepancies much simpler, such as duplicate invoices or incorrect accessorial charges.
Working with UPS Freight to correct billing errors and obtain credits means that disputes can be resolved fairly, quickly, with an amenable outcome for both parties involved.
One of the most valuable bi-products of the audit process is the report deck and the invaluable insights this provides, from a detailed breakdown of freight spends to real-time detailed information on current trend to better inform decision making at every stage.
So, what makes this process so invaluable to thousands of global businesses? Freight invoices can be complex, particularly when they include accessorial fees, surcharges and varying rate structures. Without auditing these invoices, businesses risk overpaying or missing opportunities to optimise their freight spend, making the FAM process critical.
Recovering overcharges along with identifying and correcting billing mistakes leads to immediate cost savings and cash flow can also be immediately improved to prevent paying incorrect or duplicate charges, freeing up cash for other time-specific priorities.
Operational efficiency is hugely maximised by the reduction of manual oversights by automating the entire audit process, with better visibility to gain insights into shipping patterns, peak periods and accessorial trends. This all promotes stronger negotiation leverage by using the audit data to agree better contracts with UPS Freight.
As with all process functionality, there is always room for error. Some of the common issues with freight Invoicing which can be identified via the UPS audit process include incorrect application of negotiated discounts or rates, misapplied fuel surcharges or accessorial fees and charges for services not performed (e.g., inside delivery when not required).
Duplicate billing for the same shipment is also common, as are errors in shipment weight or class that affect pricing.
To ensure your audit process delivers results, consider the following best practices:
- Leverage Automation: Implement a freight audit software solution to compare invoices against contracts automatically and flag discrepancies.
- Regular and Systematic Reviews: Don’t treat audits as a one-off project; instead, make them a part of your ongoing financial control systems.
- Keep Accurate Records: Maintain documentation of rate agreements, accessorial charges and disputes to provide a solid foundation for audits.
- Work with Freight Audit Partners: Consider working with third-party audit experts who have specialized knowledge of UPS Freight billing practices.
- Use Audit Data for Strategy: Go beyond dispute resolution – use audit insights to identify shipping patterns and potential cost-saving opportunities (such as consolidating shipments or adjusting delivery schedules accordingly).
Many businesses turn to specialised freight audit and payment (FAP) providers to handle the complexities of auditing UPS Freight invoices. These partners contribute their experience and expertise through their familiarity with UPS Freight billing practices and common pitfalls.
Ever-evolving technology enables automated systems to reduce human error and improve efficiency and recovery support comes in the form of an active follow-up with UPS Freight to resolve disputes and secure credits.
UPS Freight Audit Management is not just about finding and fixing errors – it’s a proactive strategy to ensure every shipping dollar is spent wisely. By establishing a rigorous audit process, businesses can recover overcharges, identify process inefficiencies, and use freight data to optimise their supply chain.
