A shipment arrived on time, but the carrier’s bill includes a detention charge. Receiving can confirm delivery. To approve the extra charge, AP also needs the rate terms and evidence of how long the truck actually waited. Without those, the choice is between paying a charge nobody checked and holding the whole bill.
Freight audit has three jobs: check that each charge on the carrier bill is supported, allocate the approved amount to the receipts it belongs to, and recover costs that someone else agreed to bear. They happen in that order. An allocation can balance to the penny and still be wrong if the bill underneath it was wrong.
Check each line separately
Carrier bills mix a base charge with surcharges and extra services. Audit them as separate lines, because the evidence for each is different.
| Invoice line | Evidence to check |
|---|---|
| Base freight | Shipment reference, origin and destination, billed weight or class, and the agreed rate |
| Fuel surcharge | The applicable rate table, its effective date, and which charge the percentage applies to |
| Detention or other accessorial | The agreement, the event that triggered the charge, and supporting timestamps or documents |
| Potential duplicate | Shipment, carrier reference, amount, and prior payment status |
For certain motor carriers, U.S. federal regulations identify information that must appear on freight or expense bills. That helps you identify the shipment and charges; your carrier agreement determines the rates you’re checking. 49 CFR § 373.103 Confirm with counsel which rules apply to your carriers.
If the base charge agrees but an extra charge doesn’t, record which line is disputed and follow your policy for the rest of the bill. Give logistics the shipment details, and give the carrier the exact line and evidence it needs to answer.
Illustrative example: fuel surcharge applied to the wrong base
The linehaul charge is $1,200. Accessorials on the same bill total $250, for a bill subtotal of $1,450. The rate table in effect on the ship date sets fuel at 18% of linehaul.
- Correct surcharge: $1,200 × 18% = $216
- Carrier billed: $1,450 × 18% = $261
- Overcharge: $261 − $216 = $45
The percentage was right. The base it was applied to was wrong. Check both.
Illustrative example: a detention dispute
The agreement allows two hours of free time from the later of appointment or check-in, then bills detention at $75 per hour in half-hour increments. The appointment was 8:00, the driver checked in at 7:50, and the truck was released at 12:30.
- Time counted: 8:00 to 12:30 = 4.5 hours
- Less free time: 4.5 − 2 = 2.5 hours
- Supported charge: 2.5 × $75 = $187.50
- Carrier billed 3.5 hours: 3.5 × $75 = $262.50
- Disputed amount: $262.50 − $187.50 = $75.00
Put the appointment, check-in, and release times beside the carrier’s billed waiting time, apply the free time and increments from the agreement, and send the carrier the specific line and timestamp you disagree with.
Allocate only what you approved
Once the bill is audited, approved freight usually needs to be allocated to the receipts or items it relates to, so inventory cost reflects landed cost. Two rules:
- Keep disputed charges out of the allocation. Allocate the approved amount, not the billed amount.
- Write down the expected result before posting. Then compare it with what the system did.
Choosing an allocation basis
| Basis | Suits | Watch for |
|---|---|---|
| Weight | Heavy, low-value goods where freight cost tracks weight | Missing or wrong item weights |
| Quantity | Similar items of similar size | Mixed items where one unit is much bulkier |
| Value | Mixed shipments where higher-value items carry more cost | Overloads freight onto expensive, light items |
Your costing policy decides which basis applies. The point of the audit is to confirm the system used it.
Illustrative example: a correct total with the wrong split
A $300 freight charge covers two eligible items, weighing 200 lb and 100 lb in total. Under a weight-based allocation they receive $200 and $100 (300 × 200 ÷ 300, and 300 × 100 ÷ 300). If the system gives each item $150, check whether the transaction used quantity instead, and whether the two items had equal unit counts. The total is right in both cases; the split is not.
Illustrative example: one bill, several deliveries
A carrier sends one bill for several inbound deliveries. $600 of it identifies deliveries to two sites, and another $90 is an unsupported accessorial. Link the accepted lines to the two receipt records and give costing $600 to distribute. Leave the $90 with logistics and keep the carrier line number so any credit can be matched back to the dispute. The carrier bill totals $690; only $600 is allocated.
How this works in your ERP
| ERP | What the vendor documents | What to test |
|---|---|---|
| NetSuite | Landed cost can be recorded on an item receipt or vendor bill and allocated to eligible items by weight, quantity, or value. The transaction-level workflow uses one allocation method at a time. Oracle | Which items are eligible and which method each transaction used |
| Sage 300 | Additional costs can be prorated for one receipt or several. Proration instructions · About prorating additional costs | One charge across receipts of different values or weights; then a return or supplier credit on one of them |
| Epicor Kinetic | Kinetic Supply Chain Management describes shipment and receipt tracking and landed-cost tracking. Epicor | Which records and features your installation uses before designing an import or approval flow |
| Acumatica | Landed-cost documents assign charges to purchase receipts. Acumatica | A charge split over multiple receipts; compare the proposed allocation with the released document |
Two tests apply to any system. First, have a reviewer move a proposed charge from one receipt to another, then add up the revised allocations against the carrier bill. That catches a tool that suggests a split but leaves AP to rebuild it by hand when a receipt was picked in error. Second, if your team allocates freight in a spreadsheet today, include the spreadsheet in any evaluation. A clean invoice-capture demo skips that work.
Corrections after posting
Save the posted distribution by receipt. If one receipt is later returned, or a supplier credit arrives, identify which receipt carried the original freight before adjusting. A credit against the invoice total alone doesn’t tell costing which receipt’s allocation needs review.
Recover premium freight from suppliers
A part shortage forces the plant to ship by air. The carrier bill shows what the expedited shipment cost. It doesn’t establish who agreed to bear it. Check the purchase agreement, the reason for expediting, and the approval before asking the supplier for a credit.
Match the bill to the shipment. Record the normal service and its comparable rate, the service actually used, and any unrelated charges. If you expect to recover only the incremental cost, show that calculation separately, using the original shipment and rate evidence, not an estimate from a different lane or weight.
Illustrative: standard ground for the shipment would have cost $420. The air shipment cost $2,650. If the agreement says the supplier bears the incremental cost of expediting caused by its late delivery, the claim is $2,650 − $420 = $2,230.
Give purchasing the incident, approved expedite, carrier bill, and calculation. Record whether the supplier accepted the claim and how it will settle. If AP held a disputed amount before payment, don’t count that same amount again as a recovered credit. Close the claim when the settlement can be traced to a bill, credit, or payment. Supplier credits more generally are covered in supplier rebates, returns, and debit memos.
What goes wrong
- Allocating the billed amount. Disputed charges get capitalized into inventory, then the credit arrives and nobody knows which receipt to adjust.
- Freight hidden in the item price. The supplier rolls freight into the unit price and it shows up as a price variance. See purchase price variance.
- Closing a dispute on an email promise. Link the credit to the original invoice before closing.
- Same shipment billed twice. Once on a summary bill, once on a single-shipment bill. Check carrier references against prior payments; see duplicate payments and vendor master controls.
- Freight bill with no receipt to attach to. It lands in a general expense account and never reaches landed cost. Agree the routing with cost accounting; AP automation for manufacturers covers non-PO freight bills.
Freight audit checklist
- Carrier bill matched to shipments and receipts; unidentified deliveries held
- Base rate checked against the agreement for lane, weight or class, and date
- Fuel surcharge checked for both percentage and base
- Accessorials supported by agreement terms and timestamps
- Carrier references checked against prior payments
- Disputed lines recorded with carrier line number, amount, and owner
- Only the approved amount allocated; expected allocation written down and compared with posted result
- Posted distribution saved by receipt for later corrections
- Premium freight incidents reviewed for supplier recovery under the agreement