Freight Invoice Audit Checklist Template

Owned by the freight audit lead. Enter the date of the payment run these invoices are meant for: every due date counts back from it in working days, and this template allows three working weeks before it for the audit. Gather the agreements you check the invoices against before the invoices arrive.

• Record the period, the payment run and the people — the period whose carrier invoices this run audits, the date of the payment run they are meant for, the carriers and kinds of freight in the audit, which rules apply to those carriers, and the four people this checklist assigns
• Gather the rate agreements and accessorial schedules — each carrier’s signed rate agreement or contract, its accessorial schedule and payment terms, any rules tariff, service guide or conditions of carriage the agreement names, and any rate change agreed in writing for the period
• Set the audit’s scope and tolerance — which carriers, kinds of freight and charges this run audits, which invoices it leaves out and why, and the tolerance below which a difference is accepted without a dispute; this template leaves the tolerance to your own policy

Bring the invoices and your own shipment records together. The audit checks each invoice against what you shipped, what was agreed and what was delivered, so each of those needs your own record, not only the carrier’s copy.

• Collect every carrier invoice for the period — invoices from email, carrier portals and electronic billing gathered into one register with the carrier, the invoice number and date, your shipment reference and the amount; invoices that arrive later are added before Phase 3 ends
• Collect the fuel surcharge tables and index prices — each carrier’s fuel table or percentage from its agreement, and the published index price for each week or month the table uses, so each shipment’s surcharge can be worked out from its ship date
• Pull the period’s shipment records — every load and parcel shipped in the period from your TMS, despatch or warehouse system, with its reference, carrier, ship date, origin, destination, pieces, weight and dimensions as shipped, and the service ordered, plus every load booked and then cancelled
• Check the accrual for freight not yet invoiced — shipments in the period with no invoice yet, listed with their agreed cost for the period’s accrual, as your month-end close requires; if the close has already passed, the accrual made then checked against the invoices that arrived
• Collect proof of delivery for each shipment — the signed delivery note, proof of delivery or the carrier’s electronic confirmation, with the delivery date and time and any shortage or damage noted at delivery
• Collect the rate confirmations for spot loads — the written quote or rate confirmation for each load booked outside the agreements, with any extra charges agreed at booking

Every invoice should belong to one real shipment that was delivered, and be billed once. Invoices that match nothing, duplicates and charges for cancelled loads are caught here, before anyone checks a rate.

• Match each invoice to its shipment — each invoice linked to a shipment in your own records by its reference, bill of lading or consignment note number, ship date, origin and destination; an invoice that matches no shipment is set aside and questioned with the carrier
• Confirm each billed shipment was delivered — the proof of delivery found for each invoice, with shipments not delivered, delivered short or still in transit marked for the checks in Phases 4 and 5
• Check for duplicate invoices — the same shipment billed twice, such as the same invoice or shipment number, the same amount and date, a reissued invoice already paid, one invoice sent both by email and through a portal, or one load billed by both a broker and the carrier it used
• Check for charges on cancelled or unshipped loads — invoices for loads that were booked and then cancelled, or never collected; a cancellation charge is paid only where the agreement or the rate confirmation provides for it, at the agreed amount
• Check each invoice shows what you need to pay it — the carrier’s legal name and remittance address, the invoice number and date, your reference, the ship date, origin and destination, pieces and weight, each rate and charge set out, any tax, the currency and the total; an invoice missing these is sent back for a corrected one

Work out what each shipment should have cost from the agreement, your shipment record and the fuel table, and compare it with the invoice line by line. A change made after shipping, such as a reweigh, needs the carrier’s evidence.

• Check the base rate on each invoice — the line-haul or base rate, the minimum charge and any discount against the agreement or the rate confirmation for that lane, zone or distance, at the rate in force on the ship date
• Check the weight, dimensions and freight class — the billed weight against the weight shipped, any dimensional or volumetric weight worked out with the divisor or ratio in the agreement, pallet counts and sizes, and the freight class where one applies; a reweigh or reclass is accepted only with the carrier’s inspection record
• Check the zone, distance and service level — the origin and destination postcodes or zones, the mileage used for rates by distance, and the service billed against the service ordered, such as an express or timed service billed where a standard one was booked
• Check the fuel surcharge — the surcharge worked out from the carrier’s fuel table and the index price for the ship date, applied only to the charges the agreement names, and not charged at all where an all-in rate already includes fuel
• Check accessorial charges — each extra charge, such as waiting time, tail lift, residential or timed delivery, redelivery, storage or a toll, allowed by the agreement or confirmed at booking, billed at the agreed rate, and backed by evidence, such as arrival and departure times beyond the agreed free time for waiting
• Check tax, currency and totals — the tax rate and treatment, the currency and any exchange rate the agreement sets, and the arithmetic of each line and each total
• Check added charges against the 180-day rule — US motor carriers only: any bill for charges added after the original bill, such as a reweigh, a reclass or a late accessorial, checked for when it was issued, since a carrier must issue it within 180 days of the receipt of the original bill to have the right to collect those charges

A charge for a service that was not given is not paid. Late and failed deliveries are checked against what the agreement or the carrier’s guarantee promises, and loss and damage go to a separate claim.

• Check deliveries against the service promised — late deliveries, missed collections and failed deliveries found from the proof of delivery and tracking records, against the transit time or guaranteed service in the agreement or the carrier’s service guide
• Claim service guarantee refunds and credits — a refund or credit claimed through the carrier’s own process and within its time limit for each failure the agreement or the carrier’s guarantee covers, and no charge paid for a premium service, such as a timed delivery, that was not given
• Pass loss and damage to the cargo claims process — shipments lost, damaged or short passed to whoever handles cargo claims, since a claim follows its own process, evidence and time limits; this template pays or disputes each invoice on its own terms and does not take a claim off an invoice unless the agreement allows it

Record every difference in one place, then decide which to dispute. Answering that there are charges to dispute adds the tasks to raise them with each carrier, decide what to pay meanwhile, record the replies and, after the payment run, track them to the end.

• Record the differences found — each difference with the invoice, the carrier, the kind of error, the amount billed, the correct amount and the difference, and the differences inside your tolerance marked as accepted
• Raise disputes with each carrier — a written dispute to each carrier through its own process, listing each invoice, the charge disputed, the correct amount and the evidence, and asking for a credit note or a corrected invoice
• Decide what to pay on disputed invoices — for each disputed invoice, pay the undisputed part and hold the rest, hold the whole invoice, or pay in full and claim a credit, as the agreement allows, recorded for the payment recommendation
• Record the carriers’ replies before the payment run — credit notes and corrected invoices received, disputes the carrier rejected with its reasons, and disputes still open, carried into the payment recommendation

The approver decides what is paid. Nothing after the approval can be completed until the approver completes it, with Approved or Approved with changes. Not approved shows a rework task above it and leaves the approval open.

• Prepare the payment recommendation — the invoices to pay in full, pay in part and hold, the total to pay by carrier, the differences found and recovered, and anything the approver should know, such as a large spot load or a carrier with repeated errors
• Rework the audit before approval — not approved only: each point the approver raised put right, such as a check repeated, a dispute added or an invoice moved between pay and hold, and the payment recommendation updated
• Approve the invoices for payment — Approved, Approved with changes or Not approved, with the changes or the reasons, recorded by the approver alone

Accounts payable codes and pays only what was approved, holds the rest, and tells each carrier why a payment is short.

• Code each approved invoice — each invoice coded to the account, cost centre or department in your chart of accounts, with freight you recharge to a customer or a project marked for re-billing
• Check the carriers’ bank details before payment — each carrier’s bank details matched against your supplier records, and any change confirmed by a call to a number from your own records before it is used
• Pay the approved invoices in the payment run — only the approved amounts paid, held invoices left out, and part payments made as recorded
• Send remittance advice with the reasons for short payments — each carrier told what was paid, which invoices were held or paid in part and why, and which credit notes are expected

Report the period’s findings, fix the causes of errors that recur, and follow open disputes until each one is settled. In this template the report falls five working days after the payment run.

• Report the period’s findings — the total billed and paid, the differences found and recovered, by carrier and by kind of error, disputes still open and service failures, to the people the audit reports to
• Fix the causes of repeated errors — errors that recur, such as an old rate still loaded in a carrier’s system, a fuel table applied to the wrong charges, or wrong weights or addresses on your own shipping documents, raised with the carrier or your own team, each with an owner
• Update the rate records for the next period — new agreements, rate changes, fuel tables and accessorial schedules filed for the next audit, and the scope and tolerance reviewed
• Track open disputes until they are settled — each dispute followed up until the carrier issues a credit note, a corrected invoice or a rejection with its reasons, and escalated under the agreement if it stalls
• Check credit notes and refunds against what was agreed — each credit note or refund checked against the agreed amount and set against the right invoice or the next payment
• File the audit record — the invoice register, the findings, the disputes and replies, the approval and the payment record kept together, for as long as your records policy says