Entrusting your freight audit and bill payment to a third party is a decision that should not be taken lightly. In an industry that has seen fraud, embezzlement, bankruptcy, and lawsuits, it can be a daunting choice to undertake. However, by asking the right questions, you can be sure that you have found a trustworthy provider who will provide you with the all of the desired benefits of outsourced audit and payment, including greater data visibility.
Selecting a Provider
If you’re considering outsourcing your audit and payment services, there are a few common sense steps you can take. By following these steps, you will mitigate risk in your service provider selection process. Once you have selected your provider, you will have access to well-audited transportation data – an accurate and comprehensive data set that will allow you to improve budget forecasts, optimization and execution and will provide you with a competitive advantage.
- Increase your due diligence.
Gather more information on your provider’s financial condition. Insist on audited financial reports and statements. These reports should be reviewed by a qualified financial analyst or accountant within your organization. Your finance team should be able to provide you with a professional assessment of the financial condition, liquidity and strength of the prospective provider.
- Expand the scope of references.
Request at least three references from clients of similar size and scope to your organization. Also, investigate with the carriers how promptly and accurately they are paid from the provider. Another good point of reference is whether the provider attends industry conferences and association events – reputable providers don’t hide from these activities; they are involved and often lead at these events.
- Insist on a bill payment process that provides checks and balances.
Key steps include:
– Recognition of authorized carriers – verification of carriers who are to be paid
– Distinct and secure accounts that prevent commingling of funds
– Limited access to the account – consider a single person for administrative access and a select few with read-only access
– Separate individuals involved in receipt and disbursement of funds
- Include additional terms in your agreement.
Include language in your audit and payment agreement that covers what will happen with your funds, the timing of those transactions, separate accounts so there is no commingling of your cash with another of the provider’s clients, and corresponding transaction and disbursement reports.