The best LTL KPI for measuring billing accuracy is simply the percentage of accurate bills.
Incorrect freight bills drive the accountants crazy and drive the costs up. In addition to the hours of reconciling bad bills, the added cost has to be accounted for somehow. Sometimes it has to be passed on to clients, who were already billed for freight or the added cost has to be absorbed by the shipper. Neither solution is a good one.
Some companies pay outside auditors to identify and recover billing errors. Auditors usually get paid for each bill audited and some even get a percentage of the recovered savings, so they have a vested interest in more incorrect bills. Regardless of who does the freight bill auditing, shippers should measure billing accuracy with the LTL KPI described in this article.
LTL KPI – Calculating Billing Accuracy
To calculate the billing accuracy, divide the number of correct bills by the total number of bills.
Example: 61 correct bills divided by 64 total bills equals 95% billing accuracy.
Insights from Billing Accuracy KPI
With LTL shipping, inaccurate bills are the norm. However, there are ways to minimize the number of incorrect bills.
Shippers should measure the number of accurate freight bills. Next, they should categorize the inaccurate bills by carrier and by reason. The next step is to make the appropriate changes with the internal shipping team and or the carriers.
A freight bill should match the quoted price, unless the shipper provided an incorrect weight, freight class or NMFC number. Most shippers can begin saving money immediately by doing those three things correctly. The carrier and or the logistics companies involved can help the shipping group identify the correct NMFC and freight class.
Additional Reading regarding LTL Freight Billing Accuracy
Additional Reading on LTL KPIs & LTL Carrier Scorecards