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
- Time constraints – the reporting is needed during the 1st quarter of the year for the previous year
- Personnel constraints – The Accounts Payable team did not have time which required temporary staff to be hired
- 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
- 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.
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:
- Unused services: Discontinue services or circuits that are no longer in use, which helps reduce monthly costs.
- Negotiated rates: Renegotiate contracts with the service provider to obtain better rates or discounts on services.
- Service bundling: Combine multiple services or features into a bundled package to get discounted rates.
- 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.
- Technology upgrades: Replace outdated or inefficient circuits with newer, more cost-effective technologies.
- Volume discounts: Leverage the client’s purchasing power to negotiate volume discounts based on the number of lines or the total spending.
- Optimization of port sizes: Adjust port sizes to match the client’s bandwidth requirements more accurately, avoiding over- or under-provisioning.
- Resource reallocation: Identify high-usage areas and redistribute resources or services to better align with the organization’s needs.
- Tax and regulatory fee adjustments: Verify and correct taxes and regulatory fees, which can result in cost savings if errors are found.
- 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:
- Double billing: Charges for the same service or feature appear multiple times on the same invoice.
- Incorrect rates: Charges that do not match the contracted rates or discounts agreed upon with the service provider.
- Unauthorized charges: Charges for services or features not requested or approved by the client.
- Misapplied taxes: Incorrect application of taxes or regulatory fees, resulting in overcharges.
- Billing for disconnected services: Charges for services that were previously disconnected or terminated.
- Incorrect usage charges: Overstated usage charges due to metering errors or incorrect data.
- Billing for non-existent locations: Charges for services at locations where the client does not have any telecom services.
- Incorrect service plan charges: Charges for a more expensive service plan than the one agreed upon or requested.
- Incorrect circuit charges: Charges for circuits that are not in the client’s inventory or have been assigned incorrect circuit IDs.
- 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.
$1.3M in Telecom Refunds and Cost Savings: Case Study
TEM Process Automation Saves $100K to QSR Chain in Year 1
RadiusPoint helps organizations manage spends quickly and conveniently. In the case details below, learn how RadiusPoint saved a retail client from overspending valuable telecom dollars. Case Background: Nationwide restaurant chain with 240 restaurant locations and…Read More
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
Telecom Service Outages: How to Avoid Them During an Acquisition
Telecom service outages often occur when an organization divest a part of its business…Read More
Does Your Enterprise Face These 5 TEM Challenges?
When selecting a telecom expense management service partner, it is best practice to consider…Read More
Optimization & Cost Cutting in 2023
Because we are experts in expense management and cost cutting, our clients ask…Read More
$100K+ in Cost Savings with TEM & Support Desk Services
This case study shows how a manufacturer succeeded in generating cost savings of…Read More
Divestiture: Inventorying Telecom Assets Avoids Hidden Charges
As part of its core competences in M&A Support Services, RadiusPoint accompanies…Read More