Auditing your parcel invoices is a proven way to immediately reduce your parcel spend by 2-5%. By auditing your invoices, you can request refunds for several different types of refundable charges - Service Failures, Manifest Errors, and Erroneous Billing Charges.
If your company spends $1m/year with UPS or FedEx, and does not have a process in place for auditing parcel invoices, you are likely over-spending by $20-50k each year.
With the opportunity to reduce your parcel invoices by 2-6%, you’re probably asking: “How do I capture these refunds?”.
Here are your two options -
Option 1: Audit your own parcel invoices in-house
OR
Option 2: Use a third-party to audit your parcel invoices
While it’s absolutely possible to audit your own invoices in-house, there is a considerable amount of labor, time, and experience required to capture all eligible refunds.
Consider the following before choosing to audit your carrier invoices in-house –
1. Carriers will not notify you when a shipment delivers late – This means that someone will need to manually cross reference the tracking info on each shipment with a guaranteed delivery date matrix doc to determine which shipments are eligible for a service failure refund.
PRO TIP – Service Failures (late deliveries) make up 90% of eligible refunds.
2. You must file a claim for each individual refund – Whenever a service failure, manifest error, or erroneous billing charge is identified, a claim must be submitted, tracked, and followed up on to ensure that a refund is credited back to your shipper account.
PRO TIP – Service Failure claims must be filed for within 14 days of being invoiced for the shipment.
3. Labor expenses could potentially outweigh the savings incurred from auditing your own invoices – Most parcel audit providers offer their services via gain-share based pricing. Meaning, they will only bill you for a portion of the refunds that they are able to capture. If an audit provider is not able to generate savings, you won’t own them anything.
PRO TIP – Erroneous billing charges are nearly impossible to identify without auditing software. There are simply too many different ways that erroneous billing charges can be applied to your invoices. However, these charges typically only account for 5-10% of eligible refunds.
If you’re interested to learn more about utilizing a third-party to audit your parcel invoices – feel free to check out Empact’s Parcel Audit service page at https://www.empactparcel.com/audit-recovery-service
Empact Parcel is a third-party logistics provider that specializes in cost-saving solutions for UPS, FedEx, and DHL shippers.