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S ec t i on 3 : Compar i son to Pr i vat e S ec tor Prac t i ce s
Transportation Management in the Federal Government
| Best Practices Report: 2012
17
These robust freight payment systems that are currently available to the
government sector are on par with those available to the private sector.
American Shipper’s
research on freight payment often highlights the
value of these systems in terms of efficiency gains, but equally important
is data collection and management. An efficient and effective approach
to freight payment can yield valuable insights that are critical to plan-
ning processes and fine-tuning procurement and execution.
The government is on the right track for its pre-pay audits, as
American
Shipper
research found carriers prefer shippers’ audit payments prior to
completing the transaction. The government sector can only benefit
from auditing if it is complete, so best-practices here should follow
those of the private sector in looking at all critical elements of every
freight bill, from the obvious to the subtle charges.
For the audits themselves, the government does a basic match of invoice to
bill of lading and checks rates. The audits that can be performed include:
• Valid trading partner
• Two-way header and line item
match
• Three-way header and line
item match (BOL / PO,
Receipt, Invoice)
• Origination (valid origin and
destination types)
• Contract price (line haul and
accessorial)
• Hard and soft duplicate
checks
• Transit /service completion
• Service level
• Valid account
• Residential /commercial
address
• Incorrect address
• Manifested not shipped
• Multiple pickup fees per
location
• Lost packages
• Damaged packages
• Services charged/not available
• Valid accessorial
• Incentives (volume tiered
discounts and rebates)
There are two areas in which the government sector remains challenged
in terms of freight bill auditing. First, the mandate that requires agen-
cies to conduct freight payment audits does not cover parcel shipments,
which leaves a significant amount of transportation cost unchecked.
Second—and perhaps more important—government freight audits have
little or no threshold for inaccuracies, which can lead to additional costs
for the government and their carriers stemming from disputes and
reprocessing of invoices and payments.