Is your carrier the perfect fit for your business? It’s hard to know without understanding your shipping data — how much you ship, how large it is, how far it travels and how fast it must go. And the clearest way to develop a profile of your shipping spend is to perform an audit on recent invoices.

Parcel auditing can help your company recover funds for late deliveries, billing errors, and misapplied surcharges. But it can also offer valuable insights about your overall shipping spend. Tracking your company’s invoices allows you improve your bottom line immediately by collecting money your carrier owes — and it can lift the veil on which areas you should target in your next negotiation.

Invoice auditing can help you track five key performance indicators that help you understand how well your carrier serves your needs.

1. Does Your Parcel Carrier Deliver Packages On-Time?

On-time performance is probably the clearest picture a company can get into how their carrier is performing. Between 3% and 5% of deliveries arrive late, and occasional mistakes are unavoidable — but if your carrier is delivering packages outside its promised window more than 5% of the time, even if it’s only by a few minutes, that may be indicative of consistently poor performance.

Not only can parcel auditing offer a quantitative measure of your carrier’s on-time performance — it can also save your company money.

Most carriers offer to reimburse shipments that arrive even 15 minutes late. But few companies review invoices closely enough to hold their carriers accountable for these small mistakes. Submitting claims for those reimbursements can help your bottom line, and it may even push your carrier to improve its performance.

2. How Much of Your Shipping Spend is Eaten up by Surcharges?

It probably won’t surprise you to learn that surcharges were companies’ single biggest complaints about their carriers in a 2017 Parcel survey. Beyond base rates, shippers must pay additional fees for holiday shipments, overweight packages, large parcels and long distances. But do you know how much your company actually spends on each type of surcharge?

Many companies have a broad sense of which surcharges affect their bottom line most, but auditing your invoices can lift the veil on exactly how much of your company’s shipping spend is eaten up by carrier fees and surcharges. A careful review of months or years of data may reveal some surprises.

Related: Decoding Your Shipment Data: Surprising Information Your Analytics Reveal

For instance, a change in how your carrier defines an oversize package may have increased your spend by much more than company executives expected. Understanding which surcharges cost you the most can show you what to target in your next contract negotiation.

3. How Often Do Your Invoices Contain Billing Errors?

Do you know how accurate your carrier’s invoices are? With dozens of different types of surcharges, billing mistakes are more common than you think — and even if they only increase your bill by an extra percent or two, they can have a big impact on your bottom line.

Again, most companies don’t have time to review every invoice for accuracy. Delegating that work to trusted partners like Reveel’s consultants can ensure your billing statements are accurate — and Reveel’s team can take care of recovering the money your company is owned, which can be an arduous process.

4. Does Your Parcel Carrier Have Service Failures?

On the rare occasion that a package fails to arrive altogether, shippers face angry customers at best and lost customers at worst. No service is perfect, and occasional mistakes are unavoidable — but do you know how frequently your carrier fails?

Holding carriers accountable for their mistakes is essential to making sure you’re getting what you’re paying for, whether that’s a refund for a missed delivery or better rates in the future. If your carrier misses deliveries more than average — and if you know exactly how often because you’ve audited your invoices — you can use that as leverage in your next negotiation.

5. Are You Getting What You’re Paying for?

Sometimes, after carriers and their clients negotiate new contracts, it takes time for pricing managers to update rates. If you’ve negotiated a new pricing floor or better dimensional divisor, begin auditing your invoices immediately after your new contract takes effect to make sure those changes have been accounted for.

Invoice auditing can help your company recover funds that your carrier owes for late or missed deliveries, which improves your bottom line immediately.

But perhaps more importantly, data garnered from invoices helps executives understand exactly how much of their shipping spend is eaten up by surcharges, billing errors and carrier mistakes — points that you can target while negotiating your next contract.

Invoice auditing is arduous and accuracy is critical. Working with a partner like Reveel can help busy executives delegate this work to a team of experts they trust. The insights — and funds — gained from auditing are extremely valuable to company leaders who want to thoroughly understand their shipping data and maximize what they can do with it.

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