Phone Auditing Saves the Corporate Bottom Line (12/8)

Phone Auditing Saves the Corporate Bottom Line

Companies looking to reduce operating expenses should take a closer look at their telephone bills. "Approximately 80 percent of companies with multiple phone lines are paying far too much for their phone rates and equipment rentals," says Barry Francini, president of New Jersey-based Tariff Billing Specialists. David Wilner of Equitable Audit agrees. "In more than half of the audits we perform, we find billing mistakes. These are not intentional mistakes, but they do occur," he explains.

The auditing process can take between two and six months to complete, but the benefits are almost immediate. "For example, if a customer is being over-billed $500 per month, and that mistake is corrected, there is an immediate reduction in the monthly expense," explains Wilner. The amount of savings depends on many factors, including size of the organization, number of locations and frequency of line changes. "Often, the number of line changes they request of the telephone companies and the proper handling of those changes by the many departments within the telephone companies is a major factor," explains Francini. He says his firm has delivered numerous checks for millions of dollars to several clients. "For example, NBC in New York received over $10 million from NYNEX back in 1989."

To uncover these savings, phone-auditing firms request billing records from the client's telephone companies. Then, they conduct a complete inventory to verify what services the client actually has and determine the correct tariff charges for those services. Many businesses are also paying for services they don't use or lines that are not active, says Francini, and most clients have no idea what the correct tariff charges are for any service they are renting from the telephone companies. "As a result, incorrect billing can go on for decades undetected. These overcharges are recoverable. Often we can get these savings back to the client retroactive several years," he explains.

"In addition, in many instances, there are discounts for the total combined usage each month as well as term-plan agreements," says Wilner. Other factors include regulatory fees and miscellaneous charges billed by various long-distance carriers.

Phone-auditing services are especially cost-effective for large companies with several locations. However, since most auditing firms work on a contingency basis, this option may also be considered by the small- to mid-sized firm. "If there are no over-billings, our fee is zero," says Francini. He adds that savings are not exclusive to any one business segment.

"The rate is determined by the size of the customer's bills," says Wilner. "Our fee can be anywhere from 25 percent to 50 percent of any recovery and/or savings depending on the circumstances. Most businesses do not consider this a cost, per se, because these are recoveries and savings that they would not otherwise obtain." Francini adds, "A phone audit is a no-risk, no-cost opportunity to uncover what can amount to thousands of dollars in hidden savings."