West Atlas guide
How to audit a 3PL invoice against your rate card.
Check three things for each charge: what the contract allows, how much activity actually happened, and what the warehouse billed. Start with the fees you see most often, such as storage, handling, and parcel freight.
By Patrick Metz, Principal at West Atlas
Pull the invoice, contract, and activity records
Use the rate card and any amendments in effect during the billing period. Gather the itemized invoice, warehouse activity exports, shipment records, and any credits or approved exceptions. If a line can’t be tied to an activity record, flag it as missing evidence.
Check each charge in five steps
- Identify the service and billing unit. Confirm whether the line is billed per order, unit, carton, pallet, or storage period. Check that the description matches the rate card.
- Verify the quantity. Match picks, receipts, storage, or shipments to the right billing period. Look for duplicate charges and activity billed again after a correction.
- Apply the contract rate. Check effective dates, tiers, minimums, and approved surcharges. For parcel freight, check the applicable service, zone, and billable weight when the contract uses those fields.
- Calculate the variance. Compare the expected charge to the invoice amount. Group discrepancies by cause so reviewers can spot repeated issues and distinguish missing records from apparent overbilling.
- Prepare the review packet. Include the invoice line, contract reference, activity record, expected amount, and difference. Finance can then decide what to approve, query, or dispute.
Worked example: a handling fee
Illustrative numbers. The invoice bills 1,200 cartons at $0.80 each, or $960. The warehouse export confirms 1,200 cartons. The applicable contract rate is $0.65 per carton with no surcharge in this example.
Expected charge: $780. Difference to review: $180. Send the invoice line, warehouse export, and rate-card row to finance so they can confirm the rate and decide whether to request a credit.
When the same checks repeat
Automate the matching and calculations, then send the exceptions to a person for review. Start with recurring charges that have clear rate rules and reliable activity records. Track which discrepancies turn into credits so the team can follow through.
In one consumer-brand engagement, West Atlas’s audit found $50K in 3PL overcharges. Read the case study or see how the automated audit works.
Need help setting up the audit?
Bring a sample invoice and describe how your team reviews it today. We can discuss what to automate and what evidence the workflow would need.