Companies across the globe are importing and exporting millions of products on a daily basis, and each move comes with its own set of commercial invoice and packing documentation, Incoterms, customs rules, duty and tax implications, data filing and retention requirements, etc. While many companies are doing this, few are truly covering all the requirements in a complete and accurate manner. Many people do not realize how complicated the audit process is and how vital record keeping is to the process. With countless items beyond just contracts stored via disparate systems, often in different languages, the challenges of global freight audit are many. Quite simply, companies can be doing better. Tracking global commerce activity across an entire enterprise can be done more efficiently, and the results can directly increase profit.
When refining global freight audit processes, companies need to focus on improving three main areas:
1. Better Information Gathering Capabilities
On the surface of any global freight audit project is one task that seems basic but can be complicated: information gathering. This information includes carrier agreements and contracts, pricing, terms and conditions, tariff definitions, addendums and more. Gathering this data for a single country may be straightforward; however, pulling together all this information on a global scale is another story. Companies are dealing with documents from multiple regions with different countries and many different carriers, which means some documents are likely in multiple languages.
Complete and current contract and pricing information is vital to a successful audit. Putting together some standard operating procedures (SOPs) around the gathering of information will ensure the right, complete information is obtained and accessible.
2. Unified Platform to Store and Share
While information gathering is absolutely essential, freight audit success will be achieved only when there is visibility to all vital data. Because companies are auditing invoices from shippers that are large, small, domestic and international, there are many variables between file types, languages and more. Having a unified, single platform enables true data visibility that spans all systems from all partners, in all locations, regardless of language. From freight invoices to packing slips to duties and tax information, everything is recorded and stored in an organized way, offering a single system for all documentation and corresponding data to be viewed or pulled and shared with ease.
3. Proven Implementation Methodology
In order to truly utilize a unified platform, integration between disparate systems is mandatory. For an implementation of this magnitude to go off without a hitch, a well-established, proven implementation methodology should be sought and used. Keep in mind that not every company employs the same systems; some companies will have enterprise resource planning (ERP) systems, many multi-nationals will be running on multiple ERPs, others will have various ways of storing information (e.g., spreadsheets), and some smaller or older companies might even have information documented via pen and paper.
A well-established, global implementation methodology needs to be employed in order to achieve global freight audit success. PRINCE2, Projects in Controlled Environments, is a proven and accepted methodology for effective project management that could be applied in a global freight audit implementation situation. PRINCE2 encompasses putting a structure in place that is organized, defined, measured and reported in a consistent manner so all entities around the world have visibility to a common process. According to PRINCE2, all projects should have:
- An organized and controlled start
- An organized and controlled middle
- An organized and controlled end
With specific SOPs developed and tested through each step in this process, systems can be implemented according to contract terms.
Companies that commit to getting freight audit and payment right will improve the overall import and export process and become more profitable as well. While it might seem like a complicated process, companies can invest in obtaining the help needed to ensure all required information is gathered, stored and shared consistently.
Dominic McGough is Managing Partner, enVista EMEA, and Doug Kahl is Vice President for enVista Transportation Solutions, Americas.