Why is a Freight Bill Important?
Freight bills have become a necessity in financial auditing and help companies transparently record every transaction related to the shipment of goods. They further allow a company to verify whether it is correctly billed, which can help avoid certain very expensive disputes between a shipper and a carrier.
Furthermore, freight bills ensure smooth operations by ensuring that all parties are aligned on costs and terms, further building trust and accountability. By having the charges laid out clearly, shippers can confirm their accuracy and, when discrepancies are present, they can be identified quickly, making freight bills valuable for maintaining financial accuracy and greatly reducing misunderstandings.
How Do Freight Bills Differ from Other Shipping Documents?
The freight bill must be distinguished from other vital shipping documents, such as the bill of lading. Although both are vital in the shipment process, they serve entirely different purposes.
The bill of lading is a type of contract and receipt for goods in transportation. It sets out the terms and conditions of shipment ownership, describing what is being shipped and who is responsible for the item’s transport.
On the other hand, the freight bill is only concerned with the financial side by listing the shipment costs. These two combined get the shipments not only correctly accounted for but also financially cleared, each playing its role in logistics.
Who Uses Freight Bills?
The freight bill is used by the carriers, shippers, and even financial professionals along the whole logistical chain. The carrier issues these invoices to the shipper for payment purposes. Shippers use freight bills to settle transportation costs and verify service details.
Accountants and auditors also check freight bills to prove the accuracy of a company’s accounting records, which legally have to be presented according to regulatory standards. For accounting and compliance teams, freight bills serve as a basis for documentation for financial reporting and auditing purposes, hence shipping costs are reflected on the books of the company.
What Should Be Included in a Freight Bill?
Freight bills should include several crucial details. They must have the shipper’s and recipient’s information and list the items shipped along with their weight.
Details like shipment date and delivery terms are essential. Charges are broken down for clarity and any additional fees must be clearly itemised. Clear itemisation enables shippers and carriers to understand costs and track any unexpected expenses, ensuring clarity and accountability in the billing process.
