Line-by-line: How Logistics Managers are recouping misbilled shipping costs with AI invoice auditing

What would you do with more logistics budget? Invest in better warehousing, hire more staff, optimise last-mile delivery?

This isn't just a hypothetical question: more and more Logistics Managers are actually finding themselves with extra cash to spend thanks to AI-powered invoice auditing. By automatically cross-referencing shipment costs against contracted rates and submitting courier claims for billing errors, AI invoicing tools like Claimit are helping e-commerce Logistics Managers recoup 12% of their overall shipping costs. Here's what you need to know.

Overcharges and unidentified errors: the world before AI invoice auditing

Shipping surcharges are agreed with third-party couriers during the contracting process. But that doesn't mean these surcharges are always correctly calculated. At Claimit, we've found that 4% of courier invoices are misbilled. Multiply that by the number of packages you send per month and it quickly adds up.

Be it accidentally overweighing a parcel or charging for labels that were printed but not sent, there are many ways that billing errors can occur and couriers have a good track record at providing compensation. For example, if your UPS Express delivery arrives a day late, they'll refund you the cost of shipping.

The problem is: invoicing mistakes are easy to make, but spotting them is hard. Given that courier invoices arrive weeks or months after delivery, it requires manual line-by-line reviews to check that what you sent was correctly billed with the right surcharges. This is something that humans struggle with, but AI excels at.

How automated invoice auditing works

With AI invoice auditing, every single shipment is scanned, cross-referenced and validated line-by-line, flagging errors and then filing claims. Here's how it works in three steps.

1. Automatically cross-reference surcharges and contracted rates

Every invoice, line-by-line. The AI tool audits every charge against your contracted rates, zone tables and weight bands in order to catch any deviation from your carrier agreement, such as overcharges or hidden surcharges.

When surcharges are found - such as fuel adjustments, additional processing costs or oversize fees - the AI will validate these surcharges against your actual shipment data and flag if there are any discrepancies. The AI will also spot if there are duplicate invoices for the same shipment or any billing anomalies, such as costs for shipments that were scanned but not sent.

2. Automate claims for billing errors

From rate overcharges and invalid surcharges to weight and zone discrepancies, the AI tool picks up every misbilled item and catches any repeat or duplicated charges. This can range from a service issue (i.e. not arriving on time) to human error (i.e. being charged for the wrong address).

The AI will not only flag these overcharges, but compile them into dispute packages and submit the claims to carriers with supporting evidence - with no manual work required from the logistics team. You can then watch the compensation credits mount up on one centralised dashboard.

3. Get dashboard analysis of courier charging trends

The AI platform doesn't just make hard savings through recouped costs - it also provides detailed analytics on courier charges in an easy-to-read dashboard format.

For example, you can see a breakdown per city, region and shipment, such as 450 shipments in Northern Ireland accruing £900 of surcharges at an average £0.50 per shipment.

What's more, you can compare courier charges. For example, you might send 10,000 shipments with Evri, which accrue £15k of costs at £1.50 per shipment, whereas your 1,000 DPD shipments might pick up £2,000 in additional charges at £2 per shipment.

The AI will identify patterns (i.e. weekend deliveries cost 30% more on average) and then provide actionable advice, such as switching couriers for your Northern Ireland shipments to save 15% more than your current courier.

More logistics budget: the results after auditing courier invoices

Transportation costs account for over 50% of most e-commerce logistics budgets, with last-mile delivery often the most expensive part. But AI-powered invoice auditing helps you soften the blow by:

• Recouping shipping costs. By automatically catching billing errors and making compensation claims, you recoup thousands in overcharges and invoice mistakes, so you only pay for the service you agreed to (and received).
• Improving cash flow. With a constant stream of compensation credits, you can make better use of your budget.
• Optimise courier choice. With complete visibility over courier charges, you can identify the cheapest and most efficient way to ship goods to customers, and choose couriers according to route or shipment type.
• Negotiate better contracts. Armed with courier charge info and insights on courier trends, you can also re-negotiate your courier contracts with better terms.
• Free up your team's time. Eradicate the need to manually scrutinise invoices and free up your time to focus on more valuable tasks.

For example, UK outdoor sports retailer Sigma Sports was losing thousands because of invoice discrepancies. After implementing Claimit in less than a week, Sigma identified and resolved 22+ billing errors per month, eventually saving £240,000 over a calendar year.

Check out our interview with Tom Hughes, Head of Operations at Sigma, to learn more.