Meaning
Logistical verification process that matches shipping documentation against physical receipts and purchase orders to ensure billing accuracy. This activity identifies discrepancies between what was promised in the contract and what was actually delivered to the warehouse. The use of bill of lading reconciliation prevents overpayment for missing or damaged goods during transit.
It stops applying once the invoice is cleared and the goods are formally entered into the inventory system.
Freight Audit
Payment of transportation fees depends on the confirmation that the weight and quantity of the cargo matches the carrier’s report. Analysts perform a bill of lading reconciliation to spot errors in the rating of the freight or the application of fuel surcharges. Discrepancies often lead to a formal claim against the carrier for the difference in cost.
Accurate audits reduce the overall spend on logistics by eliminating charges for services that were never rendered.
Settlement Accuracy
Financial records of a transaction are only finalized after the receiving report is cross referenced with the original shipping bill. This step in the process ensures that the accounts payable department is not paying for items that never left the supplier’s facility. When a bill of lading reconciliation reveals a shortage, the supplier must issue a credit note before the balance is paid.
Tight control over these documents protects the cash flow of the buyer and maintains the integrity of the supply chain.
Inventory Control
Internal management of stock levels requires a precise match between what is arriving at the dock and what is entered into the warehouse management system. A bill of lading reconciliation provides the necessary data to update the perpetual inventory record with confidence. Reliable data prevents the stockouts that occur when the system believes items are present that were never delivered.
High frequency counts and documentation reviews are standard practices for companies with fast moving consumer goods that require near perfect accuracy in their stock counts.
