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Finding and Fixing Billing Errors


On the other side of the data center, a telecom specialist glances over the company's monthly 25-page phone bill and signs her "OK to pay" at the top. She doesn't take the time to go through it carefully, because the bill is incredibly detailed, and the total seems to be approximately what the company paid last month. What she doesn't realize is that the phone bill contains fees for three features the company never uses, two overcharges for tariffed services and monthly tolls for six phone lines the company no longer owns. The company is paying about 35 percent more than it should.

Every day, otherwise cost-conscious IT departments lose money by overlooking one of the most common sources of hidden costs: the vendor's final invoice. One auditing firm estimates that seven out of 10 companies are paying too much on their IT bills. Another auditor reports that enterprises are overpaying their voice and data network services bills by as much as 40 percent per month. An electronic procurement tool vendor suggests that IT departments could recover a full 1 percent of their annual budgets if they simply approved bills faster.

Reasons To Outsource Procurement

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"In 2004, my company saved approximately $68,000 by identifying billing errors and correcting them before payment was made," says the CEO of a small IT consulting firm who asked not to be identified. "We found that invoices were only about 70 percent to 75 percent accurate on first pass." Other IT professionals reported different figures--the percentage of inaccurate invoices ranged from 2 percent to 90 percent--but all reported at least a few errors on their monthly bills.

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