Fixed-scope audit

1. What is a fixed-scope audit?

A fixed-scope audit is a contract compliance and recovery review priced as a single fee for a defined set of vendors, categories, and invoice period, agreed in writing before the work starts. The fee does not change based on what the review finds. It differs from a contingency audit, where the fee is a percentage of recoveries, commonly 25% to 50% of recoveries across ValueXPA diagnostics and traditional recovery audit firms alike, and the client keeps 100% of recoveries under.

The scope itself is the boundary that makes the pricing possible. It names the vendor categories, the contracts, and the invoice period under review, for example freight and 3PL invoices over 12 to 18 months. Everything named in that boundary gets checked against the contract; nothing outside it does.

2. How does the fee get set before findings are known?

The fee is set from the size of the scope, not the size of the findings: how many vendors, contracts, and invoice-months are in the review. Two companies with similar spend and similar contract complexity land on similar fees even though one may turn out to have far more drift than the other, because the price reflects the work of checking, not the dollar value of what the checking uncovers.

This separates the cost of the audit from its outcome. A buyer evaluating the fee can compare it against the vendor spend under review and their own sense of how well that spend has been managed, rather than trying to predict a recovery amount first.

3. What does a fixed-scope audit typically cover?

A fixed-scope audit covers whatever vendor categories and contracts are named in the scope document. Common categories include freight and 3PL, contract labor and staffing, maintenance and repair, IT and professional services, MRO and Class C consumables, and calibration and safety compliance. Each category has its own contract mechanics: rate cards, volume tiers, surcharge schedules, and not-to-exceed caps, and the audit checks invoices against whichever of those apply.

Coverage is a design choice, not a default. A buyer with a specific concern, freight surcharges after a fuel price change, or contract labor overtime premiums, can scope the audit narrowly around that concern instead of buying a review of every vendor category at once.

• Freight and 3PL: Accessorial charges, fuel surcharges, and lane rates checked against the carrier agreement.
• Contract labor and staffing: Bill rates, overtime premiums, and shift differentials checked against the staffing contract.
• MRO and Class C consumables: Catalog pricing and volume tiers checked against the distributor's rate card.
• Maintenance and IT services: Not-to-exceed caps and billed scope checked against the statement of work.

4. How does a fixed-scope audit compare with a contingency audit?

A fixed-scope audit charges one fee set before the work starts and lets the client keep 100% of recoveries. A contingency audit charges a percentage of whatever it recovers, commonly 25% to 50% of recoveries across ValueXPA diagnostics and traditional recovery audit firms alike, and charges nothing if it finds nothing. Each model aligns incentives differently, and the better fit depends on how confident the buyer already is that meaningful drift exists.

Contingency pricing has a genuine case: a buyer with no budget for an audit and real uncertainty about whether drift exists pays nothing unless the auditor finds something. A fixed-scope audit asks the buyer to pay regardless of outcome, in exchange for a defined delivery period, a defined scope, and the full recovery.

Neither model is wrong. The distinction is about who bears the risk that the review finds little, and who keeps the value if it finds a lot.

• Fee basis: A fixed-scope audit sets one fee from the scope. A contingency audit takes a percentage of recoveries, commonly 25% to 50%.
• Share of recoveries kept: The client keeps 100% of recoveries under fixed-scope pricing; under contingency, the percentage fee is deducted first.
• Cost when findings are small: The fixed-scope fee is unchanged either way; the contingency fee shrinks proportionally with the findings.

For the wider pattern this sits inside, start with the margin drift guide.

5. Frequently Asked Questions (People Also Ask)

What is a fixed-scope audit?

A fixed-scope audit is a contract compliance and recovery review priced as a single fee for a defined set of vendors, categories, and time period, agreed before work starts. The price does not change if the review finds more or less leakage than expected.

How is a fixed-scope audit different from a contingency audit?

A contingency audit charges a percentage of whatever it recovers, commonly 25% to 50% of recoveries, across ValueXPA diagnostics and traditional recovery audit firms alike. A fixed-scope audit charges one fee regardless of findings, and the client keeps 100% of what it recovers.

Does a fixed-scope audit cost more if it finds more leakage?

No. The fee is set by the scope, the vendor categories and time period covered, not by the dollar value of what the audit finds. Findings can vary widely without changing what the engagement costs.

What does scope mean in a fixed-scope audit?

Scope means the vendor categories, contracts, and invoice period the audit will cover, for example freight and 3PL invoices over 12 to 18 months. Everything inside that boundary gets reviewed, everything outside it does not, and the boundary is set in writing before the audit begins.

Why would a company choose fixed-scope pricing over contingency pricing?

Contingency pricing ties the auditor's incentive to what it recovers, which suits a buyer with budget uncertainty. Fixed-scope pricing removes that incentive question and lets the company keep the full recovery, in exchange for paying the fee regardless of outcome.

Can a fixed-scope audit be scoped to a single vendor category?

Yes. Scope is a design choice set in the engagement document. A buyer can limit the audit to one category, such as freight and 3PL or contract labor, rather than reviewing every vendor category at once.

How long does a fixed-scope audit take?

ValueXPA's Margin Drift Diagnostic, a fixed-scope engagement, delivers a prioritized recovery and prevention roadmap in 2 to 4 weeks. Duration for a given engagement depends on the scope agreed at the outset.

Does a fixed-scope audit check both historical invoices and contract terms?

It can cover both, depending on scope: retrospective recovery work that reviews historical invoices for duplicate payments or missed credit memos, and contract compliance work that matches invoices against rate cards, volume tiers, and surcharge schedules going forward.