How to Lower Your Freight Audit Discrepancy Rate

 Every shipment generates a carrier invoice, and behind every invoice is an assumption: the numbers are accurate. Yet, discrepancies happen in different ways, from small issues like misapplied accessorial fees to larger problems such as duplicate charges or dimensional weight errors.

Freight Audit Discrepancy Rate measures how frequently those errors occur and how much effort it takes to resolve them. High discrepancy rates can drain time, increase shipping costs, and impact your bottom line.

This is the fifth blog in the Shipping Metrics That Matter series. So far, we’ve explored:

• On-Time Delivery
• Order Cycle Time
• Perfect Order Rate
• Shipping Cost Per Order
  

What Is Freight Audit Discrepancy Rate?

Freight Audit Discrepancy Rate = (Number of invoices with errors ÷ Total invoices audited) × 100

Common discrepancies include:

• Accessorial charges applied outside of contract terms (e.g. residential delivery, liftgate, oversized fees).
• Duplicate invoices for the same shipment.
• Incorrect DIM weights or zones that increase billed cost.
• Currency or tax mismatches on international shipments.
• Late delivery claims that do not match service guarantees.

Tracking this KPI helps logistics and finance teams spot systemic billing issues early and prevent revenue leakage.

How Freight Audits are Conducted

 At its core, a freight audit is a data validation process. Carrier invoices are gathered and validated against contracted rates, shipment data, and service agreements.

Key Freight Audit Steps include:

• Invoice collection: Pull all carrier invoices, electronic feeds, or EDI statements.
• Contract validation: Compare billed charges against negotiated contracts, tariffs, or published rates.
• Shipment matching: Validate invoice details (weight, dimensions, zones, and service level) against ERP or WMS data.
• Exception handling: Flag discrepancies for dispute or reconciliation with the carrier.
• Payment authorization: Approve only the corrected or verified invoices for payment.

 Manual audits can handle this at small volumes, but automation becomes essential in enterprise shipping environments with multiple carriers and global transactions.

5 Ways to Reduce Freight Audit Discrepancy Rate

Lowering your discrepancy rate isn’t just about fixing errors after the fact—it’s about building strong controls and visibility into your shipping process.

• Automate invoice audits: Use software to validate every line item against your ERP data and carrier contracts.
• Maintain accurate contracts: Store and manage carrier agreements centrally so billing rules are always current.
• Track accessorial charges closely: Monitor fees like residential, Saturday delivery, or oversized charges for consistency.
• Standard data flows: Ensure ERP, WMS, and carrier systems use the same shipment data to avoid mismatches.
• Analyze historical errors: Spot recurring issues by carrier, lane, or product to address root causes.

Optimizing Small Parcel Freight Audit with AuditERP

Reducing Freight Audit Discrepancy Rate demands a system that can handle the scale and complexity of modern carrier billing while giving finance and logistics teams clear visibility into spend.

AuditERP solution addresses this need directly within your system by:

• Validating invoices at the line-item level against contracts and tolerances to catch surcharges, accessorials, and misapplied fees before payment.
• Integrating seamlessly with SAP ERP and ShipERP Core, ensuring clean data flow across finance, logistics, and carrier systems.
• Supporting multiple input formats (EDI, IDOC, uploads) to match how carriers submit data, reducing manual reconciliation work.
• Logging and tracking disputes natively in SAP, which speeds up resolution and provides a clear audit trail for carrier negotiations.
• Delivering spend analytics that highlight recurring discrepancy patterns and opportunities for cost recovery.

Instead of running freight audit as a disconnected process, AuditERP embeds controls directly into the workflow. This creates a consistent, transparent view of shipping spend that helps companies close the gap between what they planned to pay and what they pay.

Final Thoughts: Making Freight Audit Discrepancy Rate a Core KPI

Freight Audit Discrepancy Rate may not get as much attention as delivery speed or order accuracy, but it directly affects profitability and process efficiency. Treating it as a KPI provides a health check on both data quality and carrier relationships.

With clear definitions, automated audits, and actionable reporting, companies can reduce disputes, strengthen financial controls, and improve trust across their shipping network.

As logistics grow more complex and carrier billing models evolve, having confidence in every invoice is just as important as having confidence in every delivery.

Next in the Shipping Metrics That Matter series: Address Error Rate—why incorrect address data causes downstream costs, and how to prevent them with better validation and ERP integration.