TRANSPORTATION

ACCOUNTING

4/10/2015

Transportation Accounting

Transportation Accounting and Cerasis

WHO IS CERASIS?

The way that your company

manages its freight accounting
can have a tremendous impact on
your bottom line. According to
Inbound Logistics and recent
studies, a shipper could reduce
the cost of their freight invoice to
as little as 5 to 10 percent of the
average $11 price. And thanks to
the freight accounting services
offered by Cerasis, it's possible to
save an additional 2 to 5 percent
just due to the reduction in errors,
inaccurate charges, and duplicate
payments.
There is of course a lot to manage
when it comes to transportation
and freight accounting, and as
such it's important to have a

professional on your side. Its'

even more important when your
company relies on daily
shipments, and when you're
ready for assistance there are
plenty of different ways we can
help you. We offer a variety of
freight accounting services
including:
Freight payment
Freight auditing
Freight invoice consolidation
Taking a closer look at our
transportation accounting
services can help you get the
most from your business.

IN THIS WHITEPAPER

Freight Audit

Page 2

Benefits of Freight Audit

Page 3

Freight Bills versus Bills of Lading

Page 4

Bills of Lading
Page 5

Making Your Freight Invoice

Work For you
What Are Accessorials

Page 7
Page 9

Freight Bill Pre Audit or Post Audit

Page 10

Using Transportation Strategies

For Smarter Accounting

Page 11

TRANSPORTATION ACCOUNTING

Freight Audit

Technology is making a big

change in virtually every sector of
the industry, and using a
goodtransportation management
software system allows shippers
to carefully review and control
freight costs. But there are still
plenty of reasons to utilize
manual freight audit techniques
as well, and for most businesses
the best solution is to combine
the two together.
There are numerous challenges
that come into play, and plenty of
reasons that keeping a close eye
on freight shipments is
important. These include:
Combined Less than a Load
Shipments
Changing oil prices
Transit times and the impact on
profit
Constantly shifting quotes
Mistakes in billing

Simply put, there's a lot to it and
while automated systems can
help, there's still a lot of work that
needs to be done. It's important
to understand that automation is
important without it, the
personnel costs of managing
every single invoice becomes too
great. The same applies to large-
scale audits. And with audits that
are too small, not enough
information is even gathered to
make the process worth the cost.

Combining Manual and
Automated Freight
Management

As a result, the best way to save

in your shipping costs is to utilize
existing performance data in
order to develop future
procurements of freight, future
carrier strategies, and future
shipping processes. In short, since
the freight audit takes place after
you've already spent your money
on the shipment, you are really
looking at the future, not the
past.

Is the software working properly

with the transportation
management system?

The key is to combine the use of

freight auditing software with a
manual freight audit on a periodic
basis. This helps eliminate issues.
For example:
Is software information being
entered properly?
Are all settings still accurate?

One simple mistake in data entry

can change months of data, and
as a result it's important that you
trust in professionals to
periodically examine your
situation and your system,
making sure that any variances
are accounted for in order to
mitigate any future issues.
Outsourcing works, and about
36% of companies avoid using
software at all due to expense or
complexities. When you
outsource your freight audit
processes, you'll be able to let
your team continue focusing on
their efforts while the
professionals handle the audit.
It's a solid idea that's worth
considering.

TRANSPORTATION ACCOUNTING

Benefits of Freight Auditing

Companies are beginning to

understand that controlling
freight costs means taking a new
interest in their freight audit
process, and outsourcing the
process has led to big changes for
companies. Benefits include:
More productivity in house as
your team is freed up to focus on
other areas of their jobs
Recent data shows that freight
costs can make up about 10% of a
company's expenses. But
carefully monitoring freight can
gradually lead to reductions in
costs by locating better freight
prices
Removal of discrepancies
discrepancies in freight can be as
much as 8.8% of the total
invoices, and those differences
can lead to serious costs and
numerous problems.
Companies have found that
outsourcing can lead to lower
expenses it can actually reach as
low as 5 to 10 percent of the total
cost of handling things internally.

Our Freight Audit Process

Cerasis takes a very serious
approach to the freight audit
process, and we follow a basic set
of procedures to ensure that you
get the best results possible. Our
process includes the following
steps.
The customer begins the
process by using our program to
create a shipping order, and
Cerasis delivers an estimate for
the expected charges based on
information in the shipping rate
database.
Cerasis receives an electronic
invoice from the carrier and
matches the invoice to the freight
data invoice record for validation

Cerasis compares the price

invoiced with the expected price
created from previous data
If there is a difference between
pricing, an audit is initiated to
determine why that is
Once per week, a freight invoice
consolidation process is
completed that includes running
a number of audit checks to
determine whether or not the
freight invoices are correct
Information is maintained in our
system, and the customer is given
access to those reports, including
things like which character is the
lowest cost, tracking informant,
shipment compliance, and more.

TRANSPORTATION ACCOUNTING

Freight Bills versus Bills of Lading

There are a lot of different terms

within the shipping and logistics
industries, and it's important for
customers to have a clear
understanding about those terms
it's enough on its own to help
you understand a lot of what's
happening with your shipments.
One of the single most important
terms to understand is the
difference between a bill of lading
and a freight bill. They're very
similar at first glance, but they
have some differences worth
paying attention to.

Bills of Lading A bill of lading

is an official document that gives
a precise name and number to
each item being shipped. They're
admissible in a court of law if
needed, and include information
like value, weight, and more.
They essentially represent the
agreement between the shipper
and the carrier since they detail
what is being shipped, where it's
going, and more. It's a kind of
service level agreement, and as
such it is vital to ensure that
they're accurate.

Freight Bill A freight bill isn't

admissible as evidence in a
dispute. They're essentially
invoices that include the price of
the shipment, additional charges,
and other information. It's
important to maintain them for
your records not because of any
legal situation, but for your own
records and review.
While knowing the difference
between the two is the first step,
taking a closer look at them is
important.

TRANSPORTATION ACCOUNTING

Bills of Lading

As mentioned above, the bill of

lading is a vital piece of
documentation since it serves as
a legally binding document
between the shipper and the
carrier. Some of the things you'll
find listed on the bill of lading
includes:

While the bill of lading isn't the

actual contract, it serves instead
as evidence of the contract
between the shipper and the
carrier. That's why its accuracy is
so vital.

Shipper and receiver's names

PO or account numbers used for

order tracking

The bill of lading is issued by the

carrier or their logistics provider,
and is issued in exchange for
receipt of the freight. This means
that it serves as proof that the
carrier has received the goods in
good condition.

Date of the shipment

Document of Title

Number of units in the shipment

At its most basic, this means that

whomever holds the bill of lading
essentially has the legal right to
claim the goods. But different
terminologies and different
consignments within the lading
will have an impact on the way
this title claim works.

Special instructions to the

carrier

Type of packaging
A note if any hazardous
materials are included
A description of items
NMFC freight classification
Exact weight of the shipment
Declared value of the goods
within the shipment
Essentially, the bill of lading
serves three key purposes, each
one of which deserves closer
attention as well.
Evidence of Contract of Carriage
It's important to note that the
contract between a buyer and
seller exists as soon as the buyer
places the order, and the contract
between the shipper and the
carrier exists once the booking for
the shipment is made.

Receipt of Goods

Types of Bills of Lading
There are two primary types of
bills of lading, and each one will
have a different impact on the
document of title aspect of its
existence. These two types of bills
of lading are:
Straight Bill of Lading This is a
bill of lading that is simple and
straightforward. The goods are
consigned to a designated party.
Order Bill This is a type of bill
in which the goods are consigned
over to the order of a named
party.
The biggest difference is that
straight bills of lading are
generally not negotiable, while an
order bill is.

TRANSPORTATION ACCOUNTING

Inaccuracies In A Bill Of Lading

There are numerous potential
problems that can arise when you
fail to use an accurate bill of
lading. These include:
Loss of the right to limit your
liability
The loss of P&I coverage
Loss of the right of indemnity
from the charter
Potential criminal prosecution
Exposure to claim
For instance, if your bill of lading
states that the goods are loaded
in good condition but they arrive
damaged, the receiving party will
have the right to make a claim
against the carrier. But if there is
no information or it is inaccurate,
the receiver won't have that right
and it will be difficult to get your
claim made or paid.

Ensuring Accuracy in a
Bill Of Lading

Triple check all informant on the

bill of lading before you sign

There are a few tips that you can

keep in mind to help ensure your
bill of lading is as accurate as
possible. They're well worth
keeping in mind, and include the
following.

Set up a consistent bill of lading

template that you can use each
time
Utilize the services of a third
party logistics provider and a
transportation management
system.

TRANSPORTATION ACCOUNTING

Making Your Fright Invoice Work For You

Your freight invoice is essentially

a bill that is created by a carrier
that contains the information
about the freight. It includes
information like:
Name of consignor and
consignee
Date of shipment
Origin and destination
Description of the freight
Number of packages shipped
Weight or other measurement
unit
Route of movement
Name of each carrier involved in
the shipment
Total charges due
Exact shipping rate charged
Transfer points
Address of bill
There is obviously a lot of
information involved, and the key
thing to remember is that you
need to make the freight invoices
you receive work for you, not
against you. This can sound
difficult, but it's not impossible to
do and there are several different
things you'll want to keep in
mind.

Freight Audit/Payment

Freight Payment Service

Simply put, utilizing a freight

audit is something that is worth
considering. Already, freight
costs can potentially make up
about 10% of a company's total
expenses, and rising freight costs
are a growing concern.
Overpaying for a shipment can
impact your bottom line, and as
such you should consider
completing regular freight audits
in order to ensure that you aren't
paying too much.

Another way to expedite the

process, a freight payment
service is a combination of
multiple processes to streamline
the process of managing freight
payments. It could include a
number of services and features
including:

The process is fairly simple a

third party logistics company will
receive freight bills, and they are
entered into the system. Then, an
audit is done looking at validity,
duplicate payments, tariff
application, mileage, and more.
Once the audit is complete, bills
are paid out and the data is stored
to help the business make a
determination about upcoming
costs and potentially develop new
strategies related to the shipping
process.

Freight Auditing Services

For most companies, outsourcing

is the most economical way to
handle an audit. This reduces
costs and provides better results,
and as such most companies
today outsource their audits in
order to get those better overall
results.

Electronic Data Interchange

Services
Logistics and Freight Data
Analysis

Paper Freight Bill Management

And more
Essentially, the goal is to turn
over most of the freight
management process to this third
party organization. There's a lot
to it, including things like
matching up bills of lading with
invoice data, comparing shipment
details, and more.

TRANSPORTATION ACCOUNTING

Lower changes of fraud

That final point is important.
Being able to effectively analyze
your freight information is a
major part of success in any
business. Looking at things like
freight costs, classification, and
pricing from different carriers can
all help you save money in the
long run by giving you the
information needed to make
better strategies and plans for
your company.

Easier document retrieval

Reduction in paperwork

Freight Invoice Consolidation

Freight invoice consolidation is
just what it sounds like instead
of receiving a dozen or even a
hundred freight invoices in a
given week, you receive just one.
This is a key feature offered by a
third party provider of freight
payment management, and it's a
big one. Consider the benefits it
offers:

Improved productivity
Easier to review shipping data
and information
24/7 access to weekly freight
invoices
Better overall freight analysis

TRANSPORTATION ACCOUNTING

What are Accessorials?

A company that ships physical
gods has to be able to reduce
costs and modify their expenses
in effective ways. With 10% of a
business' expenses often tied to
shipping costs, it's important to
understand what can be done to
reduce those costs. Accessorials
are one thing that deserve a
closer look, and that could help
impact your bottom line.
Accessorials are just what their
name suggests extra charges
added to freight bills that are
there due to additional services
the carrier handled. This could
include things like:
Packing
Unpacking
Extra pick ups
Fuel increases
Trailer detention
Re-delivery
Long haul fees
Hazardous materials fees
Residential adjustments
Weight adjustments
Additional handling fees
And more

In some cases, they're necessary.

But the big issue with accessorials
is that they're assessed and
applied to a shipment after it's
been completed. In fact, carriers
often leave entire accessorial data
fields blank and shippers are
barely able to understand just
why certain accessorials were
even assessed at all. As a result,
it's often difficult to plan for them
or to factor them into a supply
chain budget.
Another issue related to the
growing use of accessorials is that
they actually make up around half
of a carrier's total annual revenue.
They have no incentive to reduce
them or to give specific details
since they're bringing in so much
income. That means that it's up
to you, the shipper, to try to
reduce these costs.
Audits might seem like the
answer, but it's not always the
case. While you do need to run
regular audits, the problem is that
when you run too many audits,
you actually end up spending
more money due to the effort it
takes to run them. And with
carriers offering less and less in
the way of credits, it becomes
clear that a different approach is
needed.

Proactivity Can Help

Being proactive is the key here.
There's no way that you can
change the way that carriers
manage their accessorials,
especially since they make so
much off of them. Instead, you
need to take steps to reduce your
accessorial spending. This comes
down to a few key steps.
Analyze your company's
shipping history and what kind of
accessorial charges are dragging
down your profits the most. A
good third party auditing provider
will help by giving you clear data
that explains most of your
expenses to you.
Use scanning equipment to help
automate data entry for
shipments. Options include
scanners that measure and record
weight, dimension, and more.
Be more efficient when you
create the shipment, and pay
special attention to factors that
often lead to additional charges.
If you can reduce volume or
weight, for instance, do so, but at
the very least be sure to keep
track of it.
Trust in a third party logistics
provider. This way, every freight
invoice can be audited and you'll
have someone there to help
interface with carriers to give you
the refunds that you deserve
when inaccurate charges are
present.

TRANSPORTATION ACCOUNTING

10

Freight Bill Pre Audit or Post Audit

By now you understand just how
important it is to run regular
audits on your freight bills. But it's
worth understanding that there
are two types of audits you can
use the pre-audit or the post-
audit. Both have similarities the
bills are received and entered into
the system, and then are audited
for accuracy in things like validity,
mileage, etc. But when the audit
occurs can have a role in how it
impacts a company, too.
Pre Audit Running an audit on
a freight bill before it is paired lets
you identify various areas that
you could save money in. It also
helps you ensure that you meet
all of the various requirements for
a shipment with a carrier and that
all contractual obligations are
being met rates, taxes, and
other issues are all reviewed
before the fright bill is paid.

Post Audit While the pre-audit

lets you get a clear picture on
what to expect, it's the post-audit
that helps you identify whether or
not your account has been
overcharged, if errors exist, and
more. It's the more common of
the two, and its' vital that you run
post audits on a regular basis in
order to ensure that everything is
accurate on your bill.
By using audits properly, you
should be able to determine
whether or not you should
attempt to recover money. By
submitting a post audit and a
copy of the freight bill you can
usually prove that overcharging
occurred, and as such it's
important to pay attention to this
aspect of the freight world.

TRANSPORTATION ACCOUNTING

11

Using Transportation Accounting

for Smarter Strategies
You already know that the way
you strategize has a direct impact
on your company's bottom line.
After all, paying attention to
details means that you should be
able to get better results from
your resulting efforts. At the
moment, transportation and
shipping costs are steadily
growing. And as your company
grows, your freight costs will as
well. But it's vital that you pay
attention to freight spending in
order to keep it as low as possible
and your profits high.

In order to do so, you need

information. Information related
to shipping comes from a variety
of sources, in particular things like
shipping invoices, bills of lading,
and more. But in order to put all
of the information together, you
need to utilize a good accounting
system and run regular audits.
These audits look for a number of
things related to a bill, including:
Mileage
Accessorial charges
Tariffs
Duplicate payments
Overall validity
And more

The key things that is being

looked for are discrepancies and
costs. A good audit will help
highlight issues like overcharges
or when a particular carrier's rates
have increased beyond that of
other potential carriers.
But it's a tremendous amount of
work for a company to handle
regular audits, which is why most
businesses today outsource the
process of transportation
accounting. By doing so, you
eliminate the need to comb
through dozens or hundreds of
freight information and instead
get accurate consolidated
invoices. These consolidated
invoices let you see what's going
on, but eliminate the busy work
of managing the process.

TRANSPORTATION ACCOUNTING

12

Accounting for Freight Costs

Companies spend far more than
they realize on freight costs, and
as a result it's important to take
steps to account for those costs
on a regular basis. The key is to
run basic audits in order to gain a
clear understanding of your
expenses and where you could
save.

Consolidated Freight Invoicing

Some tips worth keeping in mind

to help include:

As you can tell, freight invoicing

involves a tremendous amount of
data and information, and it's
very common for that
information to create challenges
among those who are managing
the information. After all, keeping
track of invoices, costs, fees,
payments, and auditing can easily
become a full time job.

Know the freight cost as it

relates to the assets. In other
words, if the freight is an actual
part of the asset cost, you can
consider that freight to be an
extension of the overall value of
the asset. This is important for
recordkeeping purposes.

A consolidated freight invoices

program helps streamline this.
These programs help by giving
businesses the chance to scan or
key in the information from each
invoice. Information that is
entered into each shipment entry
includes:

Also, know the cost of your

sales-freight account. You can't
mingle your freight costs with
similar expenses, or you'll end up
with inaccurate information.

Date

Be sure that you trust in a good

logistics solutions provide to
ensure that every aspect of your
transportation accounting is
handled properly including
accounting for freight.

Cost center
Vendor
Invoice number
Cost
Weight
Service level
And much more

Once it's entered into the system

it can be sorted, cross-referenced,
and archived for easy access later.
It simplifies the entire process by
removing the huge mountains of
paperwork, which in turn leads to
numerous benefits.

TRANSPORTATION ACCOUNTING

13

Benefits of Consolidated Freight Invoice Services

The use of consolidated freight
invoice services includes the
following:
Detailed data entries and
information for each shipment
Faster, easier document
retrieval
Reduction in paperwork
Reduction in fraud
Reduction in inaccuracies,
mistakes, and overcharges
Improved productivity within
your company

Understanding Freight Bill

Automation

Easier to review information

and develop freight strategies

With all of the obvious challenges

involved in managing
transportation accounting, it isn't
hard to understand just why
automation is so important.
Freight information is already
highly complex, and the chance
for mistakes is far too common.
Automation possibilities are
numerous, and the right software
program can let you automate a
wide range of things. Possibilities
include:

Long term archival of invoices

with easy access

Digitization of all paper invoices

Ability to easily compare freight

costs to develop new strategies

Access to invoices 24/7

Saves time and money

Interface with carriers to help

resolve disputes quickly

Ability to access supporting

documents for any system

Allocate all expenses

Cloud storage with the best

programs and outsourcing
solutions
In short, consolidating gives you
much more control over how your
company operates and what kind
of results you get from it. If you're
serious about lowering your
overall freight costs and you
should be it's worth looking into
this feature offered by our
outsourcing services.

Pay freight electronically

Audit options for contract
compliance, duplicate
identification, cost review, and
more
In short, it lets you manage each
step of the process and automate
everything involved. This offers
numerous benefits to companies
including:
Elimination of paper files

Improve productivity in the

workplace
Maximize cash flow
Eliminate mistakes
Offload disputes of fright bills to
the third party logistics manager
Real time invoice visibility
And more
Essentially, automation means
that your freight bills become
data that you can use to improve
your company's bottom line
significantly. You'll be able to
review the information to make
better decisions, target cost
control measures, and much
more. In doing so, you'll be taking
steps towards a better overall
shipping department.
Here at Cerasis, we take pride in
being able to provide
transportation accounting and
auditing solutions for any
company, regardless of size or
business area. Your company
deserves better transportation
accounting, and we're here to
help make it a reality.

TRANSPORTATION ACCOUNTING

14

Cerasis Team

Implementation Team

Cerasis Technology

An Exceptional Group of
Experienced Freight Professionals
Striving to Exceed Your
Expectations

- Oversees New Account

Setup and Account Specific
Bid Process
- Conducts Commodity
Review
- Works with Your
Management Team to

Implement your Custom
Solution
- Provides Training

In-House IT Department

Dedicated Customer Service

Representative
Freight Desk
- Volume/Spot Quotes
- Truckload Quotes
- Routing of Inbound
Shipments
- Hotshot, International, and
Guaranteed Shipments
- Assistance with Freight in
Transit Issues
Claims Specialist
Carrier Relations Group
- Rate and Rules
Negotiations
- Carrier Contract and
Relationship Management
- Carrier Performance
Monitoring

Integration
- Working with your IT Staff,
we can help design a
solution that will pull order
information from your ERP
system and write
fulfillment and accounting
information back to your
system.
XML Web Servicesour TMS
System to perform most of the
common tasks related to
shipping. This allows you to
rate/ship from a custom built
application, retrieve shipping

CERASIS: YOUR TRANSPORTATION MANAGEMENT

THIRD PARTY LOGISTICS SOLUTIONS PROVIDER
Call Us Today at 1-800-734-5351 or info@cerasis.com