Freight bills are essential documents in the world of shipping and logistics. They have a direct impact on a shipper’s bottom line (among others), which means that accuracy is of paramount importance. But actually achieving that accuracy can be very challenging and time-consuming. Enter: auditing using automation.
What is a Freight Bill?
Before you explore the workings of freight bill automation, it is important to understand what information is contained within a freight bill and the challenges surrounding its creation.
A freight bill is essentially an invoice in terms of the information that it contains. The freight bill includes all of the details about the shipment expenses and transactions and the document is usually signed by the shipper and the freight carrier.
Freight bills are a bit less formal than other similar documents, such as a Bill of Lading (BOL), which is actually considered a legal document that could stand up in a court of law as evidence and proof of a shipment in the event of a legal dispute. The Bill of Lading is also significant because it serves as the basis for the freight bill.
A BOL is updated with expenses and costs at each stop along a shipment’s journey from origin to destination point. There is no universal format or standards for a Bill of Lading. It is a document filled with unstructured data that can be difficult to process with software. Traditionally, this information has been processed manually — a tedious and time-consuming task that is prone to errors. These errors can be passed along to the freight bill – also called a freight invoice — leading to undercharges and overcharges that can have an adverse impact on a company’s bottom line. The solution: freight invoice auditing.
What is Freight Invoice Auditing?
Freight invoice auditing can go a long way toward ensuring accuracy and maximizing profits by ensuring that the proper charges are reflected. Freight bill auditing can be a rather expensive but necessary measure. In fact, many shippers establish contracts with and outsource the task to freight invoice auditing service providers.
Accuracy is just one component of the process for freight invoice auditing. An experienced service provider will also address discounts and price breaks which are commonly negotiated between companies that routinely transact within the shipping and logistics industry.
A negotiated discount can lead to major savings for a shipper, but this can also translate into a lot of extra work during the freight bill auditing process. You can end up with a manual, time-intensive and detail-oriented project that requires verification and review of backup documentation and contracts — and that is in addition to the Bill of Lading and all of the BOL-related paperwork.
Some shipping companies handle freight bill auditing manually in-house, but it is easy to see how and why a business would opt to outsource this task to a third-party service provider — especially if that service provider has automated some or all aspects of the process with a high-tech software solution.
Freight Bill Auditing Automation With Machine Learning and Robotic Process Automation
An increasing number of service providers are automating freight bill auditing using optical character recognition (OCR) software enhanced with machine learning (ML) and robotic process automation (RPA) technology. The latter enhances the actual automation process for the audit, while advanced machine learning algorithms are used to process and capture the data.
Machine learning is particularly useful for this application because it can be used with OCR to capture unstructured data such as that found in a Bill of Lading (remember, the BOL serves as the basis for the creation of a freight invoice.) The other advantage of machine learning technology is, as the name implies, its capability to learn and improve its algorithm over time. The result is a continual improvement in terms of efficiency and speed.
By leveraging the latest technologies, tedious, costly and time-consuming manual processes such as freight bill auditing can be performed in a manner that is highly-efficient, faster and far more cost-effective. These gains can be taken a step further when OCR software is enhanced with machine learning and robotic process automation technology. The end result is an accurate BOL data capture and a reliable freight bill audit that boosts a business’ bottom line.
The right technology can elevate your shipping and logistics operations in a way that exceeds expectations with improved productivity and profitability. That is precisely where iTech Data Services can help because we specialize in technologies such as OCR enhanced with machine learning and robotic process automation technologies. We invite you to contact the iTech team today to discuss your needs and we will you find an innovative, cost-effective solution to take your operations to the next level.