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Focus on six minor expenses to improve your bottom line

Publication: Published: September 30, 2016 Full Article

In the world of banking or in any industry, most executives’ attention goes to the core elements of the business, and for good reason. Modernizing and marketing services; expanding one’s customer base; training and retaining employees—these are the factors that determine long-term success and profitability. However, minor expenses and inefficiencies can go unnoticed, and over time these fixed costs can get out of control. In my line of work, we look at the “bottom 10 percent” of expenses for banks and other companies with multiple locations. These expenses include routine operating costs such as your phone service, electricity, maintenance plans, and others—basically anything where a vendor or service provider is sending you a monthly bill. A dollar saved in one of these areas is worth just as much as a dollar earned elsewhere, and often much easier to obtain. Here are six areas I recommend focusing on, and some tips on how to keep these costs under control:


Telecom is a broad and varied spending category, with complex rate structures and billing practices that can make it hard to treat with proper scrutiny. Whether it’s your landline phones, conference lines, internet service, or even security alarm services (many of which are bundled with telecom plans), there are bound to be billing errors and unused services adding to your costs. Keep an eye out for wireless expenses in particular, since corporate cell phone plans tend to include a lot of unneeded features, like GPS navigation, which are added by default and result in an extra monthly charge. Landline phone bills also often contain unauthorized third-party charges, a process known as “cramming,” which costs Americans $2 billion a year.


With the complicated billing style of most armored car services, overcharges have a tendency to wind up on monthly invoices. One recent example that my company uncovered was a service provider charging a slightly higher fee for coin wraps than the contracted rate. While the overcharge was only a matter of pennies per wrap, the high volume of transactions meant that this was adding up tremendously. We were able to get the bank a credit for thousands of dollars based on this single billing error. Negotiating for a better rate can also yield savings in this category. There is usually at least one competitor in most markets, and it’s worth reaching out to them to solicit a bid for your services.


Many banks rely on third parties to handle archival document storage and shredding. You may be paying a sizable monthly fee for documents being stored off-site, and these costs are out of sight, out of mind. Bringing in an outside expert with knowledge of operational and regulatory requirements can be helpful to periodically evaluate which documents need to be kept, and which can be purged.


My company has found that 82 percent of our clients overspend on waste removal services by having inefficient pickup schedules. Haulers charge by the pickup as well as by volume, so your pickup schedule needs to accurately reflect each of your locations’ actual waste volumes in order to be cost-efficient. Waste haulers are also notorious for charging bogus fuel surcharges and landfill fees that aren’t mentioned in their service agreements, or exceed the allowable amounts of the fees that are authorized. Bringing in an experienced consultant to audit your waste services and negotiate a better plan with your hauler can yield big dividends.


You can’t change the price of a stamp, but there are still plenty of opportunities to cut your mail and shipping costs. For instance, postage meters are typically provided by a private-sector company, and their fees for equipment and services are open to negotiation. For express parcel shipping service, you can often claim credits or refunds when packages aren’t delivered on time, so make sure you’re tracking shipments and filing refund claims when possible. There are even automated tracking systems, linked to your UPS or FedEx account, which identify such instances and automatically file claims.


Utilities, such as electricity, natural gas, and water/sewer services, can be complicated and rate structures vary significantly from area to area. Review your accounts to determine whether all charges are actually your responsibility. Make sure meters are functioning properly, look for usage anomalies that might indicate inefficiencies or meter errors, and ensure that all your services are obtained at the lowest possible price offered by the utility. Major utilities like MLGW, NES, and Appalachian Power offer new pricing plans each year, but you can’t expect them to reach out to you to explain them. Being proactive can make a big difference over time. In conclusion, there are always a few more opportunities out there to save a buck than you might think. Whether you conduct an internal audit or hire an outside partner to do it for you, the resources you spend will more than pay for themselves. The banking industry is all about the bottom line, and eliminating unnecessary expenditures is a great way to improve it.