Compliance Audit Workflow
Last reviewed:
Quick Answer
The Compliance Audit Workflow uses AI to audit freight bills against contracted rates and carrier agreements. AI validates charges, detects billing errors and overcharges, ensures accessorial charges are appropriate, and generates dispute documentation—recovering 3-7% of freight spend through error detection.
Definition
Key Points
- Validates freight bills against contracted rate agreements
- Detects billing errors: incorrect rates, duplicate charges, invalid accessorials
- Verifies accessorial charges are appropriate and documented
- Identifies carrier non-compliance with contract terms
- Generates dispute documentation with supporting evidence
- Tracks dispute resolution and recovered amounts
- Identifies systemic carrier billing issues
- Recovers 3-7% of freight spend through error detection
How It Works
Invoice Receipt & Extraction
Receive freight bill (EDI, PDF, portal). Extract key data: shipment number, origin/destination, weight, class, charges, accessorials.
Rate Agreement Matching
Match shipment to applicable rate agreement: contract number, lanes, effective dates, rate structure (per cwt, flat, mileage).
Base Rate Validation
Calculate expected base rate from agreement. Compare to billed rate. Flag discrepancies exceeding tolerance threshold (e.g., >2%).
Accessorial Validation
Validate each accessorial charge: liftgate delivery, residential, redelivery, detention. Verify charge is appropriate and supported by documentation.
Duplicate Detection
Check for duplicate bills: same shipment number, duplicate charges within same invoice, bills already paid.
Service Level Compliance
Verify carrier met service commitments: on-time delivery, temperature compliance, special handling. Check for service failures warranting credits.
Dispute Package Generation
For identified errors, generate dispute package: discrepancy description, rate agreement citation, supporting documentation, requested correction.
Recovery Tracking
Submit disputes to carrier. Track resolution status. Apply credits. Report recovered amounts and carrier performance trends.
Common Billing Errors Detected
- ⚠Incorrect base rate applied (wrong lane, expired rate, wrong weight break)
- ⚠Duplicate accessorial charges (same charge billed multiple times)
- ⚠Invalid accessorial (service not requested or not applicable)
- ⚠Fuel surcharge calculation error (wrong rate or base)
- ⚠Minimum charge not applied when shipment below minimum weight
- ⚠Residential surcharge applied to commercial address
- ⚠Detention charge without supporting documentation (arrival/departure times)
- ⚠Duplicate invoice (same shipment billed twice)
- ⚠Service failure without credit (late delivery, damage, missed pickup)
- ⚠Incorrect freight class applied (affecting rate calculation)