Organisations in the mining sector wrestle with complex issues on a day-to-day basis, resulting in a lack of focus on freight management. The most common downfalls in freight management for this mining giant were profit leaks, inflated freight costs, and a lack of visibility stemming from inefficient systems and processes.
Profectus conducted a Contract Compliance review to identify historical invoicing errors and ongoing live auditing of invoices prior to payment for key freight service providers.
The challenge
A lack of visibility and control combined with the inability to automate freight payments resulted in a cost-leaking freight model. Without proper systems and processes to effectively manage this asset, our client was squandering millions in lost profit.
Profectus analysed detailed low-level data received from the client and its vendors, recovering 10% of the total annual contract spending roughly $1.4M in recoveries.
The errors
The most common errors uncovered by our forensic audit analysts included:
Agreed free-of-cost routes were charged
Incorrect freight and levy charges
Charged at incorrect rates
Unspecified and unapproved surcharges applied
The result
Profectus analysed detailed low-level data received from the client and its vendors, recovering 10% of the total annual contract spending roughly $1.4M in recoveries.
Ongoing compliance
The implementation of Contract Compliance technology has provided our client full visibility on their freight spend, and an ongoing compliance framework that reviews historical invoices and validates future invoices pre-payment. More specifically...
Compliance automation: With low-level data from the contract and invoice, the potential for human error is removed
Spend optimisation: Better decisions are made with more data available and deeper levels of visibility via a data feed into BI dashboards
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