There is hardly a company in the world that isn’t under continuous pressure to reduce or minimize costs while simultaneously striving for growth. Executives feel it. Purchasing departments feel it. Managers and even entry-level staff can feel it. The continual drive to do more with less has resulted in various techniques that look like good solutions, but they can be very difficult to accomplish, and at best only deliver a fraction of what a company’s total savings could be.
SIB has recently release a whitepaper exploring some of the common hurdles all companies face when trying to reduce unmanaged spend, providing unique solutions on how to get the job done more effectively. Download today!
Recurring service costs like telecom, waste removal, treasury fees, utilities, and maintenance contracts are some of the biggest culprits when it comes to excessive unmanaged spend. A large part of the problem is that for many of these services, contracts are scattered across multiple locations and/or GL codes don’t match from division to division. For these and various other reasons, it can make it very hard to even notice that a problem exists.
Customers are continually either overserved (paying for services they aren’t using) or over- charged (paying more than they should for the service) by vendors and it can be hard to tell whether you’re a victim or not. It isn’t a matter of how skilled your accounting department is; it’s simply that many groups don’t have the bandwidth to effectively audit these expenses, creating a lack of true visibility into your spend.
If you don’t believe that your company could possibly fall into one of these categories, you may want to pause and consider this: a 2015 audit of waste disposal services across more than 5,000 locations nationwide revealed that 94% had savings opportunities. Of these, 28% were due to billing errors or fraudulent charges, 34% were being overcharged, and 39% were paying for services they weren’t utilizing.
Mistakes like these add up quickly, costing companies millions of dollars every year without them even being aware it’s happening. Don’t let it happen to you.
The solutions for every company wishing to reduce its recurring cost burden are relatively simple in theory, but can take a lot of effort to achieve. In the case of contract consolidation, it is much more effective to perform comprehensive contract and service audits and to renegotiate with current vendors based on the best market rates. This saves you the time of waiting for contracts to expire as well as the added expense of early termination fees. Effective negotiation also prevents pushback from local managers who may not be pleased with changing vendors. Collecting these contracts can cost accounting teams enormous amounts of time, but it is well worth the effort.
These solutions have been proven to help companies reduce their exposure to unmanaged spend, although it isn’t always easy to know where to begin. Many companies try these methods but still fail to realize maximized savings across their organizations due to a lack significant experience in these methods or a lack trained staff available to implement them. Fortunately, there’s a solution that takes care of all these methods that is simple, quick to implement, and has zero up-front costs.
Many companies find the previously mentioned techniques too time consuming or burdensome to perform on their own. Other times they don’t know exactly what data they’ll need or how to collect it. With that in mind, our solution can help you identify and realize savings for your company quickly and without many of the headaches that come from doing it yourself.
SIB will take the lead in working with your current vendors to identify service levels and contract terms, check for contract compliance, correct billing errors, and obtain credits or refunds as appropriate. We’ll also identify service optimization opportunities, and negotiate better contract rates and terms based on our extensive database of benchmark rates for services. Finally, we’ll handle implementation of savings that do not change current vendors or service levels. On an ongoing basis, we’ll continue to monitor invoices for contract compliance and look for additional future savings opportunities.
The best part for our clients is that there are no upfront costs for our service. We’ll assume the entire risk of performing your review, something that would cost you significant time and money in hiring new staff or training and reassigning current resources. Also, we only get paid if we’re able to save you money, and even then only after you’ve realized the savings.
It’s a low-risk, high-return proposition for any company.
Contact us today to schedule your kickoff call and start saving.