Freight Bill Payment

Freight bill processing and payment service simplifies the task of paying carriers for the shipper.  By using a third-party freight payment company, it creates a system for the shipper to analyze freight costs and audit bills for accuracy.  The data collected through the freight payment service can be used to track shipping costs and negotiate discounts with carriers (see contract negotiation).


By using a freight payment company, it will allow:


·        Freight bills to be audited and only the correct amount paid.

·        Elimination of duplicate payments.

·        Disbursements to be made in accordance with payment terms outlined in the Carrier contract.

·        One payment made weekly for all freight charges.

·        All inquiries regarding balance due bills, past due bills, payment information to be handled by outsource company.

·        Freight cost to be monitored in various formats based on origin, destination, plant, general ledger account code, etc.

·        Establishment of a standard cost per pound, and comparison of actual costs to contracted rates.


Most providers audit the bill submitted by the carrier for accuracy before approving payment.  Because the shipper has only six months to recover overpayments, it is most advantageous to the shipper to do a pre-payment audit. 


In addition, the pre-payment audit ensures that the carrier has applied the correct rate and discount to the invoice.  It also checks to make sure that the invoice has not already been paid.


When payment needs to be made, the freight-bill service notifies the shipper that it needs to pay a carrier.  The shipper then wires the necessary funds to cover the freight bill to the service provider, which in turn issues a check for payment to the carrier.


The provider issues reports on freight activity to allow the shipper to get a better handle on shipping needs and demands.  The following are some of the data elements that are stored in the provider’s data warehouse system



The adoption of a freight management system can save the shipper money.  In fact many  freight payment companies utilize an electronic billing system that results in a reduction in processing fees.  Instead of paying a carrier by paper invoice, it is done electronically on-line.  The time spent in processing invoices is greatly reduced which reduces the shipper’s costs.


The most important element of using a freight payment system is that the shipper understands where it is spending its shipping dollars.