Telecommunications
Phone audit
Having your phone bill checked for errors could reveal some surprises.
By Todd Shryock
Smart Business Cleveland | December 2004
The phone bill is one of those mundane costs that fades into the day-to-day transactions that make up business finances.
There may be some interest when a contract is negotiated as you vie for the best rate and add-on services, but after that, the bill shows up each month and it gets paid, just another expense.
Hidden in that mundane bill may be some serious errors, though - errors that could be costing you a lot of money. That great deal you haggled over for a week may have never been properly credited to your account. The free incentives you asked for may have never been awarded or the tax being collected might be completely wrong.
An audit of your phone bill might turn up a few surprises.
"In about two-thirds of the cases we look at, we do find some form of retroactive mistake where we are able to go back and collect some money," says Brad Clark, president and COO of SpyGlass Technology Advisors, a Westlake-based telecommunications consulting firm. "The most common error is the rate and fee structure agreed to in the contract were either misapplied or not applied at all.
"What happens is, the contracts get signed, and the people who signed them are comfortable with the rates, but there is no circling back to make sure the rates were applied. The complexity of the bill makes it difficult to assess if the contractual rate was applied.
"In other cases, special deals have not been applied. Contractually, they might have clauses for certain levels of discounts or incentives that don't get applied. If the tax collected isn't correct, then we can go back through the provider and ultimately to the state or federal government to get that money back."
An audit might also reveal that you are paying for services that aren't being used by your company.
"In over 90 percent of our audits, we find some services the client has and is paying for that they are not using," says Clark. "The obvious action is to go in and eliminate those services."
Sometimes companies just have more capability than they need.
"A client might undergo a structural change and have a reduction in the number of employees or convert from one technology to another," says Clark. "Companies convert over to a new system or let people go but don't look at their telecom based on their new needs. If a business goes through a downturn or shift, telecom doesn't always go down with it.
"In another scenario, a company might adopt a new technology for their phone service, but the old environment never gets eliminated or scaled down."
An analysis of usage, fees and services may also result in some leverage for negotiating better rates based on volume when contracts need to be renewed. An audit should also include your wireless services and Internet providers.
"In smaller companies, they might only be paying a few dollars for a landline but have a large wireless bill," says Clark. "We are finding that many companies have more monthly spending on wireless than a traditional land line."
An audit should be done by a vendor-neutral party, if possible. The only thing usually needed is a few months worth of telecom bills and a meeting to assess the company's telecom needs. Most consultants work on a contingency basis, so you only pay if they find overcharges or a way for you to save money.
"The problem requires a unique set of expertise to thoroughly evaluate the technical side of things and how it operates," says Clark. "You have to understand how you are being billed and the service rates that are contracted for.
"Organizations typically don't have that expertise in-house or the time it takes to evaluate it. Telecom is one of those issues for business where they think that if everything works, everything must be OK." How to reach: SpyGlass Technology Advisors, www.sgta.net
