Parcel Audit: The Ultimate Guide to Saving on Shipping Costs

When you’re shipping dozens or even hundreds of packages each day, it’s likely that your carriers will make mistakes here and there. However, small errors like an incorrect package weight or a duplicate charge can quickly add up to hundreds of extra dollars spent. 

By conducting regular parcel audits, you can identify these errors and avoid these unfair additional shipping costs. Here’s a look at how parcel audits work, why they’re important, and how to conduct them in your E-commerce business. 

What is a Parcel Audit? 

A parcel audit is the process of reviewing all of your shipping documents, including bills, invoices, and labels. During the review process, you will look for errors that could affect your long-term shipping costs.

Parcel audits can be conducted manually, although this approach comes with some challenges. Manually auditing your shipping documents takes an extensive amount of time that could be spent on other projects. On top of that, you might miss some errors present, which means you could be leaving money on the table. 

Instead, it’s more efficient to use digital tools to conduct your parcel audit. The right software programs will help you catch errors automatically so you can address the problem right away and avoid overspending on shipping costs. 

What are Common Billing Errors to Look For? 

There are a variety of possible billing errors that could lead to unnecessary extra shipping charges. Here are some of the most common errors to watch for during your audits. 

• Incorrect rate: You were supposed to receive a discounted rate, but were charged a standard rate instead. 
• Late or failed delivery: The parcel arrived at its final destination later than the shipper had initially guaranteed, or never left the shipping facility at all. 
• Incorrect size or weight charges: You were charged for a larger or heavier package than what you sent. 
• Incorrect delivery address: The delivery address was not input correctly, resulting in erroneous high charges. 
• Duplicate charges: You were charged two or more times for the same shipment. 

These are just a few of many possible billing errors that could happen when shipping large volumes of product at once. When auditing your shipping costs, look for any details that are out of the ordinary, as it’s easy for information to get lost in translation as it moves from system to system. Compare your invoices with your internal shipping documents and look for discrepancies to see where the errors might have occurred. 

Why is Auditing Your Carrier Invoice a Good Idea? 

Conducting regular parcel audits can help your organization save an extensive amount of money in the long run. Even small shipping errors add up over time and can make it difficult to achieve your financial goals. 

Roughly 5% of shipping invoices contain errors. This means that if your business makes 500 shipments over the course of the year, approximately 25 of those will contain errors. Even if these mistakes are small, this could quickly add up to hundreds of dollars lost in shipping costs. 

By auditing the invoices you receive from your shipping carrier, you can address any issues right away and get the refunds you’re owed, before it’s too late to correct the problem. The audit process also results in more transparency for both parties, facilitating open communication and better service from your shipping provider. 

Finally, auditing your shipping expenses can help both you and your carrier operate more efficiently in the future. During the audit, you will identify areas where you can improve your shipping strategy to save time and money moving forward. Regular audits also incentivize your shipping providers to be as accurate as possible in their audits and avoid errors. 

How to Audit Your Parcel Invoices

Here’s a step-by-step look at how to audit your parcel invoices manually for errors. Keep in mind that you may need to customize this process based on your company’s unique shipping strategy. 

1. Gather all shipping invoices from your carriers

Start by assembling all shipping invoices from the carriers you work with for the time period you want to audit. Today, most shipping companies make these invoices available through their electronic data interfaces, or EDIs. Some carriers will also have invoices available to download as PDFs. 

Once you have downloaded your invoices, convert them all into the same format so you can review them efficiently. You should also round up your internal shipping agreements and documents so you can compare the information for accuracy.  

2. Review your billing codes and rates

Start your audit by reviewing the billing codes and rates on each invoice to make sure they’re accurate. Cross-reference the rates with your shipping agreements to identify any errors. Make sure all agreed-upon discounts have been applied and that the correct billing codes have been used. 

3. Conduct a line-by-line assessment

Next, go through each invoice one line at a time to search for errors. Start by reviewing accessorial charges like additional handling fees, fuel surcharges, and residential delivery fees for accuracy. 

Then, review each shipment to make sure weight, dimension, and delivery charges are accurate, looking for service level errors. For example, if you requested standard ground shipping, make sure the charges reflect that and that you were not billed for express services. 

Throughout the process, keep an eye out for duplicate charges where a shipment was erroneously added to the system twice. 

4. Document errors and review them with carrier

When you notice errors in your invoices, note them down and highlight any appropriate documentation. Then, contact your carrier to request a refund for any erroneous charges. 

Conducting a manual parcel audit is a time-consuming process, and you may not catch all errors present. To make your audit process more efficient and more accurate, try implementing digital tools like Buster Fetcher to catch these errors for you. Buster Fetcher automatically reviews your shipping invoices for errors and files refund claims on your behalf. 

Parcel Audit Checklist

When conducting your next parcel audit, use this step-by-step checklist to guide the process. 

• Select a timeframe for the audit
• Request invoices from carrier
• Organize invoices chronologically, by carrier, and by type
• Review current rate agreement with carrier
• Check invoices for correct rates and billing codes
• Review all accessorial charges for accuracy
• Review each invoice line item for correct weight and address
• Review each invoice for appropriate service level, noting any late or failed deliveries
• Double-check for duplicate charges
• Document any errors and trends noted during the audit
• Contact shipping carriers for refunds
• Work with carriers to address any underlying problems and negotiate better rates

Save Time on Your Next Parcel Audit With Buster Fetcher

Instead of conducting a manual parcel audit, use Buster Fetcher to speed up the process. Buster Fetcher analyzes your invoices for errors and files refund requests automatically, helping you save money without the extra time and effort. Create your free Buster Fetcher account today to get started!