Freight Audit
Freight audit is a process within the logistics ERP that verifies shipment charges, rates, and third-party costs before client invoicing. It ensures that all billed services align with contractual agreements, tariff rates, and actual shipment activity. This validation step prevents overcharging or underbilling, strengthens financial integrity, and supports customer trust in freight forwarding and transport billing workflows.
How Freight Audit Works in Logistics?
Once a shipment is completed or reaches a billing milestone, the ERP runs a freight audit by comparing recorded charges, such as freight, handling, and surcharges, against rate sheets, vendor bills, or client contracts. Discrepancies are flagged for review or approval. Approved charges move into invoicing, while exceptions are logged, corrected, or escalated for resolution. The audit process is automated, reducing manual review time.
Impact Across Logistics Functions
Sales and Customer Service
Sales teams ensure that final charges match quoted rates, which helps prevent disputes. Customer service uses audit records to explain invoice breakdowns and support transparent billing communications.
Operations Management
Operations staff can match vendor charges and service logs with shipment events in the ERP. This helps confirm that the correct services were delivered and billed based on actual job activity.
Documentation and Compliance
The ERP maintains audit trails of all freight charges and approvals. This supports internal controls, client reviews, and third-party compliance audits with clearly documented rate validation steps.
Finance and Billing
Finance teams rely on freight audits to ensure billing accuracy before invoices are released. This reduces credit notes, collection delays, and the financial risk of billing discrepancies.
Management and Analytics
Managers use audit data to monitor billing accuracy, vendor overcharges, and revenue leakage. Reports highlight exceptions by route, carrier, or customer, enabling smarter negotiation and policy enforcement.
Conclusion
Freight audit is a vital ERP process that ensures billing integrity in logistics. By validating charges before invoicing, it protects profitability, prevents errors, and reinforces client confidence. For logistics providers, automated freight auditing not only improves billing accuracy but also adds a critical layer of control across operations and finance.