The words “auditing” and “audit” refer to a systematic examination of accounts and records. The words are, of course, most commonly associated with the IRS and taxes, but auditing is an extremely useful tool for all businesses, and for many aspects of business, not just the financial or accounting realm. A comprehensive audit reveals more than just errors or unethical conduct: it shows areas of needed improvement as well as procedural risks and inefficiencies and, naturally, excessive costs.

This is particularly true nowadays in the parcel shipping industry. Largely because of the rise of e-commerce shipping, parcels and small packages are being shipped at a higher volume and rate than ever before. It is easy for a shipper to get lost in this volume, and in the fast pace of change in the retail industry. However, performing small parcel auditing, especially with the help of an audit company or a third party logistics provider (3PL) who offers services can save the shipper enormously in terms of both money and time to improve their logistics and supply chain management.  

Auditing does not replace accounting. When used alongside a robust accounting framework,  it analyzes the finances and operations of a business in a custom, detail-oriented, and efficiency-enhancing way. It does not matter whether it is national or international shipping that is being audited, the expertise and latest generation of shipping software solutions, especially transportation management systems (TMS), can handle and even mix both seamlessly.

Without a parcel audit company partner, the parcel shipper may not be getting what they are paying for, and be totally unaware of that fact, which makes their logistics management strategies less efficient. As an example, it often happens that a parcel shipper will pay for air transport, but the carrier will then opt for ground shipping instead (an “air-to-ground downgrade”) if they know that the delivery window will still be met. Auditing can help the shipper recover the over-charge in such a case. To further help save money shipping, small parcel auditing can also help the shipper recover money when the delivery window has not been met by the carrier, for whatever reason.

Auditing can help with the collection, aggregation and analysis of data. The data-analysis can then be queried in various ways. For example, it allows the shipper to discover whether deliveries tend to cluster in particular geographic areas, which leads to the possibility of consolidating deliveries, which is an enhancement of supply chain efficiency. Likewise, incorrect delivery addresses can be identified through the data analytics derived from small parcel auditing, so that shipment returns and the costs of failed delivery attempts can be minimized.

When working with a vendor or producer and receiving inbound shipments, a retail shipper may be dealing with whatever carrier or provider is convenient for the vendor/producer (and whatever time-frame they have chosen in order to clear out their spaces), and be unaware of whether that means financial disadvantages for themselves. Auditing can help the retail shipper discover whether there could be a better way, and form the basis of new contract negotiations with the vendor.

There are many benefits for the parcel shipper to reap from small parcel auditing. A reputable small parcel audit company who is able to deploy their expertise and help their client implement TMS solutions makes it well worth the investment of the time it takes the shipper to explore the options and select the right partner and solutions for their own business.

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