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ESG Reporting: Eliminating 800 Man-Hours of Data Gathering

Many organizations have a workable Corporate Social Responsibility (CSR) plan in place.  However, Environmental Social Governance (ESG) will be the new benchmark going forward to ensure that both your organization and brand stay relevant and socially acceptable.  How does your organization get ready and stay ready for this very intricate and detailed reporting that is required for electric, gas, and water consumption?

Challenge

A nationwide retailer with over 1,600 locations has required reporting for the electric, gas and water consumption for each one of their locations.  The information required must be gathered from the monthly invoices.   The time to gather this information manually would have taken over 800 hours which would have involved someone reviewing each invoice for each month and contacting the vendor for the necessary information that was missing from the invoice.

Issues to Resolve

  1. Time constraints – the reporting is needed during the 1st quarter of the year for the previous year
  2. Personnel constraints – The Accounts Payable team did not have time which required temporary staff to be hired
  3. Knowledge Gap – the vendor’s invoices vary from vendor to vendor so being able to read an electric, gas, or water invoice was necessary to get the work completed timely
  4. Invoice Availability – the invoices for a portion of the required review had been moved off-site and had to be recalled for this review.

Opportunity

Identifying the requirements early in the relationship with RadiusPoint and this client created the perfect opportunity for this client to have the required reporting in advance of the need.  RadiusPoint provides the monthly utility expense management services for each of the 1,600 locations from receipt of the invoice to the bill pay portion of the process.  This utility expense management also involves energy expense management that identifies the usage in kWh, therms, and gallons to create more detailed reporting.  Using the information that was already being gathered from the invoices and adding the additional required information, RadiusPoint was able to ensure that this client had the required reporting by location for each type of service.

Solutions

The data usage that is needed from each invoice is compiled by the chosen ESG company that creates the client’s overall ESG report.  Having this accurate data when it is needed was paramount to the client.   The data is required during the first quarter of the next year for the previous year which puts a large burden on an already busy Accounts Payable department.  RadiusPoint was able to pull together the reporting and provided an ongoing report solution so that the following year, the report would be completed by the last week of January for the entire previous year.  This solution allows the RadiusPoint team to review the data and add any missing components on a monthly basis to ensure that all data is reported for the year by the beginning of the following year.  This solution alone eliminated the normal delays of trying to identify who would be pulling together this information and when it would be provided.

Once the client looked at hiring temporary staff to pull the additional required data from the invoice, it was determined that this project would involve over 800 man-hours for the 1,600 locations.  RadiusPoint’s solution provided most of the required usage data and the RadiusPoint team was able to go through and identify the missing information quickly to populate as required.

Utility invoices are not easily deciphered and having staff to read the invoices and gather the necessary data was a stumbling block for this client.  Trying to find the staff that could perform this data gathering task that was knowledgeable about the electric, gas and water services was problematic.  RadiusPoint’s team has an ESG department with knowledgeable personnel that easily filled this knowledge and personnel gap for the client.

Having the invoices on hand presented a problem for this client but it was one that was easily resolved by RadiusPoint.  All invoices processed by RadiusPoint are electronically attached to the account number and the digital image is saved for up to seven (7) years.  Reviewing past invoices was made easy with the information readily available at the click of a mouse.

The Results

Most ESG programs make provisions for reducing the cost of those services, but the “how” to achieve these cost reductions can be hard to predict.   Measuring consumption is the first step in the right direction to reducing usage and monthly costs.  The monthly ESG management services allow for the client to see the usage information on a monthly basis which in turn allows for necessary pivots that could result in a reduction of usage.

RadiusPoint’s monthly invoice processing and expense management services manage the utility invoice from receipt to payment of the invoice.  Utility and telecom auditing are also important parts of the monthly service that allows RadiusPoint to fully manage the entire lifecycle of the utility or telecom invoice and service.  This client saved over $48k and received their detailed and required ESG reporting on time.

close up accountant using calculator

Telecom Expense Management (TEM) – Auditing Telecom Invoices to Detect Cost-Saving Opportunities

The telecom expense management (TEM) industry has grown in size over the last few years, concurrent with the evolution of telecom technology, the demand for bandwidth, and the rising use of wireless devices and video conference services during the pandemic.

As a result of these trends, medium-sized and large corporations have resorted to using the services of 3rd-party providers specializing in the analysis of telecom vendor services and billing in order to curb the increasing weight of telecommunication services on their P&L.

As part of their mission, telecom expense management specialists like RadiusPoint audit the invoices issued by telecom and internet service providers, to detect cost-saving opportunities and erroneous charges driving up the cost of the lines.

A few definitions

To do their invoice analysis, telecom expense management specialists will have to gather specific data points from the client and the telecom operators billing the client. Here are 11 data points that always must be collected by the TEM specialist. The TEM specialist provides the 12th one in the following table to the client.

Some definitions are necessary:

DATA POINT WHAT IT IS
Service Address / Identifier The physical location or unique identification of the client’s telecom service
Service Provider The company that provides telecom services to the client
Master Account Number The main account number associated with the client’s services from the service provider
Sub-Account Number Secondary account numbers tied to the master account often used to track usage and costs for specific departments or locations
Circuit ID/Number A unique identifier for each circuit or line that connects the client’s service location to the service provider’s network
Circuit Type The technology used for the circuit, such as T1, E1, DSL, MPLS, or Ethernet
Port Size The bandwidth capacity of the port (measured in Mbps or Gbps) used to connect the client’s equipment to the service provider’s network
PVC (Permanent Virtual Circuit) A virtual connection between two points on a network that simulates a dedicated physical connection
DLCI (Data Link Connection Identifier) A unique number assigned to a PVC in a Frame Relay network, used to identify the virtual connection
CIR (Committed Information Rate) The guaranteed minimum data transfer rate provided by the service provider for a particular circuit
Un-Audited MRC (Monthly Recurring Charge) The monthly cost for the telecom service as billed by the service provider, before the audit
Audited MRC The corrected or optimized monthly cost for the telecom service, identified during the audit process

 

Data points: how they are used for the audit

Each of the data points above has a role in the auditing process which will eventually lead to identifying potential savings or billing discrepancies. The table below summarizes the use of these data points.

Data Point Auditing Purpose & Identifying Savings/Discrepancies Reference/Source Document Flagging Cost-Saving Opportunities or Billing Discrepancies
Service Address / Identifier Verify service locations and validate service usage Service provider invoices, contracts, and client’s internal records Compare the service address with the client’s records to identify unused services or locations
Service Provider Ensure appropriate providers and services are being used Service provider invoices and contract Look for better rates or service options from alternative providers or negotiate with the current provider
Master Account Number Verify account accuracy and organization Service provider invoices and contract Ensure charges are billed to the correct account and identify unauthorized charges
Sub-Account Number Analyze costs and usage by department or location Service provider invoices and client’s internal records Identify high-usage areas, reallocate resources, or uncover billing errors
Circuit ID/Number Validate the circuits and their usage Service provider invoices, contract, and circuit inventory Compare circuit IDs with inventory to identify unused circuits or billing discrepancies
Circuit Type Assess if the correct technology is being used Service provider invoices, contract, and client’s internal records Evaluate if a more cost-effective or efficient circuit type is available
Port Size Check if the bandwidth capacity meets the client’s needs Service provider invoices, contract, and client’s internal records Identify underused ports or opportunities to upgrade/downgrade for cost savings
PVC Validate virtual connections between network points Service provider invoices, contract, and client’s internal records Ensure PVCs are correctly billed and identify unused or unnecessary virtual connections
DLCI Confirm Frame Relay network connections Service provider invoices, contract, and client’s internal records Verify DLCIs match the client’s records and identify billing discrepancies
CIR Ensure the guaranteed data transfer rate is being met Service provider invoices, contract, and client’s internal records Monitor actual usage vs. CIR to identify opportunities for negotiation or cost savings
Un-Audited MRC Establish a baseline for monthly telecom expenses Service provider invoices Compare with audited MRC to determine cost-saving opportunities
Audited MRC Identify optimized monthly telecom expenses after the audit Service provider invoices and audit findings Validate the effectiveness of the audit and track potential savings

 

Cost-saving opportunities

Once the information has been collected, and the telecom operators‘ billing has been analyzed, the TEM specialist looks for specific types of cost-savings their client can make on their telecom bills.

Here are 10 types of cost-savings a TEM specialist would look for:

  1. Unused services: Discontinue services or circuits that are no longer in use, which helps reduce monthly costs.
  2. Negotiated rates: Renegotiate contracts with the service provider to obtain better rates or discounts on services.
  3. Service bundling: Combine multiple services or features into a bundled package to get discounted rates.
  4. Optimized service plans: Choose service plans that better match usage patterns, such as unlimited plans for high usage, or pay-as-you-go plans for variable usage.
  5. Technology upgrades: Replace outdated or inefficient circuits with newer, more cost-effective technologies.
  6. Volume discounts: Leverage the client’s purchasing power to negotiate volume discounts based on the number of lines or the total spending.
  7. Optimization of port sizes: Adjust port sizes to match the client’s bandwidth requirements more accurately, avoiding over- or under-provisioning.
  8. Resource reallocation: Identify high-usage areas and redistribute resources or services to better align with the organization’s needs.
  9. Tax and regulatory fee adjustments: Verify and correct taxes and regulatory fees, which can result in cost savings if errors are found.
  10. Alternative providers: Research and consider alternative service providers that can offer better rates or service options.

Typical telecom overcharging situations and billing errors

TEM specialists use proprietary SaaS platforms to automate the analysis and processing of telecom bills. These are complex systems that compare the client’s current telecom invoices with the vendor’s conditions, the line number, and the device ID when applicable.

The function of these SaaS platforms is to accelerate and systematize the processing of telecom invoices, which is a big organization with hundreds of retail locations and can quickly become a monthly nightmare for their Accounts Payable department. In fact, it is not uncommon for a large-size organization to have to process over a thousand telecom invoices in the course of a month. This represents a very large workload, and when reduced by automation, sizable soft-dollar savings for the organization.

The TEM specialist sets up the SaaS platform to flag out any inconsistency in telecom billing, and mismatch with known rates. Here is an example of 10 common overcharges and billing errors found in a telecom operator’s invoice:

  1. Double billing: Charges for the same service or feature appear multiple times on the same invoice.
  2. Incorrect rates: Charges that do not match the contracted rates or discounts agreed upon with the service provider.
  3. Unauthorized charges: Charges for services or features not requested or approved by the client.
  4. Misapplied taxes: Incorrect application of taxes or regulatory fees, resulting in overcharges.
  5. Billing for disconnected services: Charges for services that were previously disconnected or terminated.
  6. Incorrect usage charges: Overstated usage charges due to metering errors or incorrect data.
  7. Billing for non-existent locations: Charges for services at locations where the client does not have any telecom services.
  8. Incorrect service plan charges: Charges for a more expensive service plan than the one agreed upon or requested.
  9. Incorrect circuit charges: Charges for circuits that are not in the client’s inventory or have been assigned incorrect circuit IDs.
  10. Late payment fees and penalties: Unwarranted late payment fees or penalties that are not justified based on the client’s payment history or the terms of the contract.

The job of the TEM specialist can just be to flag these errors and let the Accounts Payable department deal with the vendors to recover credits and refunds.

But TEM specialists like RadiusPoint offer their clients to take over this part of the service, and recover credits and refunds themselves, as well as follow up with billing corrections so that the same errors don’t reappear in the next billing cycle.

By identifying cost-saving opportunities and billing discrepancies, and requesting refunds and credits from telecom operators, Telecom Expense Management specialists ensure their clients can curb the rising costs of telecommunications services, spend no more than what is necessary for their organization to operate, and offer their clients valuable business intelligence in regard to the utilization of their telecom assets and their allocation by cost centers. This enables an organization to make better-informed decisions in procurement, cost allocation, and technology.

finance telecom solutions team meeting

$1.3M in Telecom Refunds and Cost Savings: Case Study

https://www.youtube.com/watch?v=7dLIP6yHOJ8

In this new case study, CEO Sharon Watkins discusses the telecom refunds and cost saving opportunities discovered by RadiusPoint during an Inventory & Audit of the telecom invoices of a global paper manufacturer. This case study highlights the need for organizations to streamline their telecom invoice processing to avoid overcharges and paying for services that telecom operators add to their billing. 

Transcript of the video

Summary

In this video, we will talk about how we were able to assist a paper manufacturer, a Fortune 100 company with a global presence, with their mobility management and telecom expense management needs.

To start with results, RadiusPoint obtained telecom refunds of over $450,000 on their wireless expenses in the first year of service. These refunds matched identified overcharges on wireless invoices. The primary challenge of our client was that they did not have the personnel to manage over 10,000 wireless devices and end-users. This was a global situation, the end-users were spread around the world.

The second major challenge was they could just not manage their telecom billing: at that time, invoices came in a box of over 3 feet high. According to our client, it took six people each month to go through these invoices, flipping through pages and pages to verify costs. So they needed assistance with the invoicing side, as well as with managing the servicing of so many end-users.

Inventory & Audit

We assisted our client with our proprietary platform, ExpenseLogic™, getting them set up to audit and process those invoices each month. We identified billing errors, and went back to the telecom operators to obtain all necessary refunds and reconcile the credits back on the bill.

We did identify over $400,000 in telecom refunds the first year. Those came back to the invoice. Then, still in the first year of service, we reduced costs by identifying services that were not supposed to be on their bill, or that Corporate did not want to pay for or authorize their end-users to have on their company phone. We identified over $850,000 in ongoing telecom savings (cost avoided).

Discoveries during the process

During our Inventory & Audit process, we discovered several major anomalies. For instance, the organization was still paying for phones (and services) for employees no longer on the payroll. Some of them had given their company phone to their children, and our client was still paying for them phones though these ex-employees had not worked there in two years.

We also identified instances when employees were downloading services (apps) — basically almost every phone had paid-app downloads — that were not authorized by company policy. However, since our client had no way to audit the bills, they had no idea their staff had downloaded those extra apps.

Initial TEM mission

Initially, RadiusPoint was hired by this client to perform a one-time audit, Then we continued on with monthly services for Telecom Expense Management and Mobility Expense Management.

Telecom refunds & savings

Q: Where did the $1.3 million in saving come from?

A: The $1.3 million came from two areas. First, we got over $400,000 in telecom refunds. During the first leg of our mission, as we were performing our Inventory & Audit process, we identified what actually belonged to the client, and disconnected what did not belong to them.

Second, going forward, we made recommendations that resulted in another $800,000 in telecom savings. Our recommendations aimed at cutting costs, consolidating the wireless operators, and optimizing contract rates.

That’s where the $800,000 [and ultimately, the $1.3M] came in.

TEM mission follow-up

Q: Does the client continue saving money on their telecom expenses?

A: Our client does continue to save money on an annual basis through our Telecom Expense Management services and the refunds we identify. It’s no longer a historical audit because the service occurs on a monthly basis and as the telecom invoice comes in, it is audited through our ExpenseLogic software platform. We then go to the vendor and reconcile. So yes, they continue to save money on a monthly basis.

Additional resources and references:

These links provide additional relevant information on our services and client feedback.

RadiusPoint and Telecom Expense Management: Our Presence in the Gartner Market Guide

TEM services: One of the two core business lines of RadiusPoint

Next case study:

Click here to discover how a glass manufacturer saved $100K on telecom expenses using RadiusPoint services

In this new video case study, Sharon shares how RadiusPoint helped a global glass manufacturer with large retail operations in the U.S. to overcome a lack of procurement framework, and curb their telecom expenses by $100K+ in Year 1 to get a ROI of 200% on TEM services.

business meeting in conference room

How Managed Mobility Services Cut Costs 22% ($400K in Year 1)

A food service company with a wide array of locations, distribution facilities, food plants, farms and ranches had hundreds of wireless devices to manage. Unfortunately, our client had no wireless procurement policy framework, and no structure for adding new users to their plans or for procuring new devices. Hence their decision to hire RadiusPoint to rationalize their inventory of devices and lines. This was an MMS mission, a specialty in which we have a long-running experience.Read More