Outsource vs In-House Freight Audit: A Clear ROI Comparison
Freight bills audit and payment play a crucial role in the world of logistics. Freight billing is a complicated task, and the chances of errors are high. The global freight transportation market was valued at $10 trillion in 2022 (≈7% of global GDP) and is projected to grow to $15.5 trillion by 2027; with such trade volumes, companies cannot afford even minor errors in freight billing. Hence, Freight audit services act as a helping hand to businesses around the globe. The freight audit process not only catches errors but also contributes to major improvements in the overall cost savings.
The Importance of Freight Audit and Payment
The core of freight audit is the verification of bills to make sure they are accurate. From keeping a check on overcharges and billing mistakes, it also includes the payments to the carriers. Some of the commonly found errors in invoices;
- Wrong Carrier Name and Number
- Incomplete Contact Information
- Incorrect Discount Rates
- Wrong Calculations of Weight & Dimensions
With a significant number of invoices and complex freight rates, it becomes an extraordinary task to keep the bills free of mistakes. Hence, freight audit services are essential for avoiding duplicate payments and improving transparency in logistics. The difficulty here is: Should businesses handle freight audits in-house or outsource freight audit services? Let’s explore and compare both methods.
In-House Freight Audit Services
In-house freight audit services indicate that the company manages freight invoices internally with the assistance of a specialised logistics team. This method provides the businesses with greater control and checks. It offers a direct insight into the audit results. In-house freight audit services can be customized to focus on recurring issues.
Pros of In-house freight audit services;
- Better control and visibility
- Tailored to business needs
- Stronger & direct relationships with the carriers
Cons of In-house freight audit services;
- Requires substantial manpower and dedicated expertise
- Huge setup and maintenance costs for Freight audit software
- Long-term expenses due to continuous updates
- Unnoticed mistakes can impact profitability
Outsource Freight Audit Services
Outsourcing Freight Audit means assigning this task to a third-party company having a team of freight experts. All the bills, invoices, and shipment details are forwarded to the third-party that verifies this data and reduces the possibilities of billing errors. Outsourcing freight audit services offers complex freight and bill audits in less time than an in-house freight audit.
Pros of Outsourcing Freight Audit Services;
- Offers profound freight audit knowledge
- Detects unseen billing errors and overcharges
- Access to advanced technology for faster & precise audits
- Recovers overpayments and cuts unnecessary costs
- Liberates in-house teams to focus on core business tasks
- Up-to-Date Practices aligned with the latest industry standards
Cons of Outsourcing Freight Audit Services;
- Less Control reduces direct oversight of auditing
- Providers may miss business specific needs
- Outsourcing fees can be high for complex freight
- Sharing sensitive information arise security concerns
- Communication gap can slow down the whole process
A Clear Comparison
| Factors | In-House | Outsourced |
| Control | Direct control with oversight of audits | Less direct control |
| Customization | Designed to specific business needs | Standardized processes, may miss unique requirements |
| Expertise | Requires in-house logistics team | Access to specialists with best audit knowledge |
| Technology | Requires investment in freight audit software | Use of advanced technology without client investment |
| Cost | High setup and long-term expenses | Cost can be high, but potential savings from error recovery |
| Error Detection | Risk of unseen mistakes that affect profitability | High accuracy in finding errors and overcharges |
| Focus | In-house professionals spend time on audits instead of focusing on growth | Frees in-house staff to focus on core business activities |
Why experts suggest outsource freight audit services?
- Companies with higher invoice volume & complex freight mostly hire outsource services.
- Businesses with internal staff having limited knowledge about global freight audits favours outsourcing.
- Outsourcing freight audit services offer long term cost savings.
- Outsourcing offers less errors, efficient process, and fast outcomes.
- In-house resources can be used to focus on core businesses activities.
The decision of choosing in-house or outsource freight audit services depends on the company’s unique needs, present situation, future plans, and strategic direction. The focus should be on reduction of cost, accuracy, business efficiency, and error free billing. It is essential to conduct an in-house analysis to have an understanding of recurring issues and requirements before making a decision. Remember, the goal is not just to cut freight costs but to improve overall operations for long term.
(CTA) Computyne specializes in providing inclusive Freight Audit services that restructure your logistics operations. We are equipped with advanced technology and indepth knowledge of the industry to point out billing errors. Our experts can provide you with accurate payments and reveal cost-saving techniques. Let us handle the complex freight audits so that you can focus on taking your business to the new heights.
