How important is checking invoices?

Screen Shot 2014-11-21 at 3.29.37 PMAlmost certainly you have paid or authorized invoices that were plain WRONG. We have found that approximately 1 in 10 invoices have errors, and half of the errors ones get paid anyway. Do you give your invoices a cursory glance and approve them for payment, or do you purposefully challenge each one?

And if you, or someone in your team, were checking invoices for an additional hour every day, how many mistakes would they find and correct, and how much would that add to your net profit?

  1. Assume all invoices are wrong.   Assume every invoice is wrong until proven correct.  Challenge every invoice regardless of value and importance.  Pay particular attention to:
  • Long standing suppliers who have added multiple annual increases and variations (i.e. waste management firms)
  • Suppliers who are list-picking their prices from a catalogue (i.e. office supply companies). You may have agreed prices on core products which were quoted as artificial loss leaders – only to be obscenely overcharged on the non-core off list items.
  • Professional suppliers (i.e. accountants, lawyers) who bill by the hour. It is your right to see their timesheets, remember to ask politely. They won’t like it, but at least you can see you were charged $50 for a phone call, or $30 for file retrieval.
  • Invoices with a suspicious lack of detail. No mention of date work completed, frequency, proof of delivery.
  • Less sophisticated suppliers who are less computerized. They might have a large invoice run, and may have rushed through the detail, or put in an item and hoped for the best. It happens a lot.
  1. Don’t let the little things pass – You might agree with the main item on the invoice, but what about the small items that are put in there? Is the supplier thinking they can get away with it because it is such a small amount?  Look out for additional fees or charges for shipping and handling fees that look exorbitant that were never agreed. These little things will be a fraction of your cost, but will contribute disproportionately to your supplier’s margin.
  1. Track invoices back to your original agreements, emails, etc.  It will not be practical to do this for all invoices, every time, but with a long standing supplier, it is important to regularly reconcile the invoice to the original agreement.  Establish the originally agreed price, establish signed or agreed paperwork for any price variations, and challenge each item accordingly. We find that companies can easily be guilty of agreeing to a price for a specific service and invoicing you a completely different price. Would you think to challenge it? You should.
  1. Use a Purchase Order System.  Are you using a Purchase Order (PO) system, and is it working well for you? They are normally available as an extension of your accounting platform. If done well, they are excellent. If done badly, you can tie yourself in knots with unnecessary paperwork. They are particularly important for multi-site businesses where there are several purchasers. They can be used for single use purchases or recurring blanket purchase orders for recurring purchases.  With a PO system, an invoice can only be approved if it matches the original PO, which you will have generated in advance.
  1. Invoices that under-charge your company.  Yes, they exist, too. What you do with these is of course a value judgment for you. If you bring it to your vendor’s attention – you will pay more. The upside is you win the respect of your vendor, and your relationship is deepened. If you don’t, you win a small savings break but for how long. Your vendor might later discover the undercharge, and send you a backdated corrected invoice that could be problematic on your cash flow.
  1. And lastly, are you double-checking your own sales invoices?  How about your own invoicing procedures? How accurate is your invoice run? Is anyone double checking your invoices and reconciling each line to original agreements or Purchase Orders? Incorrect invoices damage your integrity and reputation. Invest the time to make sure they are accurate, every time!

Productive Expense Reduction Strategies

report_chartWe understand that changing vendors is not always the best solution for your business. In over 82% of our recommended solutions provided to our clients, we were able to maintain their existing vendor relationships.  Expense To Profit’s cost reduction strategies go far beyond conducting a competitive bidding process. Our methodology to reduce expenses is far more intense, precise, and detailed. We identify cost savings through multiple methods, including, but not limited to:

  • Process, system, or technological improvements: We look at how processes & procedures can be made more efficient, increasing your productivity.
  • Behavior modifications: We study how products and services are used and recommend ways to save money.
  • Correction of billing errors: We identify and correct billing errors, then request credits.
  • Elimination of overcharges and/or unnecessary services: We eliminate waste by identifying what you actually use and need.
  • Rate reductions from current providers: We work with you to keep your current providers competitive.
  • Savings from alternate providers: We help you select and manage the best providers for your business in terms of service, quality and cost.

Cost Savings: Rapid, Significant Impact

If you operate on a 10% cash flow margin, then every $1 in cost savings is worth the same as $10 of revenue. In other words, if Expense To Profit were to identify $100,000 in cost savings during your cost reduction analysis, you would need to increase revenue by $1,000,000 to achieve the equivalent increase in cash flow.

Expense To Profit generates millions of dollars in annual cost savings for businesses. Our comprehensive expense reduction analysis is performed on contingency, which means we are compensated only if cost savings are identified for your business.

Experience, Leadership and Results

  • Our experienced professionals offer transparent services with little interruption.
  • Our quality leadership provides seamless integration, which exceeds typical savings.
  • Our superior consultants bring cutting-edge ideas inspired by current information on industry trends and knowledge of supply sources.
  • Our analysts bring specific expertise in reviewing contracts for errors, overcharges and savings opportunities.
  • Collectively, our definitive focus on developing core quality operational methods offers immediate and sustainable results.

Request a call for your FREE Cost Analysis Review.

Optimize Your Finances

We can help optimize your finances so you can manage and control the money your company spends every day. Effective business spend management will lead to improved profitability, and we offer a range of expense management solutions so you can cut costs and reinvest those savings back into your company.

Money is constantly flowing out of a business for everything from services to technology and office supplies to transportation. Unfortunately, many companies don’t really understand exactly where their money goes every day, and that can lead to financial management problems down the road.

Business Expense Management

Previously, spend performance management was a tool that only large enterprises used to track and optimize their everyday expenditures, but modern technology has made this available to businesses of all size. We specialize in providing these financial solutions for your business, and we have the skills and experience to help you cut costs and streamline budgets.

A company’s profitability is affected by what it can save as much as it is by the amount of revenue it can generate. Every dollar you save goes right to your bottom line, which can mean immediate changes for your business. By controlling what you spend, you will soon be able to increase earnings and find the money you need to grow your business.

Putting Spend Management First

As your company expands and different departments develop different budgets and spending procedures, it can be difficult to manage the finances of your entire business. Expense To Profit can provide the expense management solutions to help your entire company put spend management first and stay profitable.

Request a call for your FREE Cost Analysis Review.

Highest Savings Value

Expense to Profit’s goal is to deliver the highest savings value to your business. It’s Our Business To Reduce Your Costs and Increase Your Sustainable Savings. Our progressive program works in unison with your organization to ensure success. We can also collaborate and train your workforce to maintain a sustainable expense reduction program going forward.

Our service platform presents a seamless and comprehensive strategy that engages every opportunity specific to your company’s savings needs. Our strategies are guaranteed to enhance your bottom line without compromising product quality or customer service.

Cost Reduction Analysis

The analysis is implemented through a transparent process. Our network of analysts intricately mine every savings opportunity, extracting all anomalies, overcharges, and errors hidden in your overhead costs. We provide you with a complete report of strategies designed to immediately reduce expenses while simultaneously creating financial stability in your organization.

Our expertise in delivering comprehensive expense reduction solutions will prove to provide cost savings results every time. Our goal is to generate immediate savings that will  exceed expectations in areas including equipment leasing, service contracts reviews, capital expense analysis, and vendor compliance. 
Our network of professionals will not only identify and employ best pricing, but implement the entire process for your company. We will not just leave you with a pile of reports and expect you to do the rest. Expense To Profits hands on approach will provide energy and momentum to ensure that you achieve the discovered savings. The end product is complete assurance you are operating at peak optimization for maximum savings going forward.

We will lead the way to achieve the highest potential savings and non-labor expense reduction standards that are responsible for your organization’s sustained financial success.

Request a call for your FREE Cost Analysis Review.

The 3-step process to successful savings.

1. Review, Audit and Assess: This process can take from two to three weeks and includes a full review of your costs and some brief interviews with your purchasing staff and suppliers. There is minimal disruption to your operations and most work is performed offsite in our offices. You will be presented with a report outlining recommendations and a benchmark of costs from which to compare future spending and areas of immediate savings.

Value To You, Our Client – You receive a complete analysis of organizational spending with recommendations on how to reduce your costs.

2. Design, Implement and Negotiate – Cost Savings Program: This process can take from one week to eight weeks, depending on the scope of the project. You will be presented with a cost savings program that when implemented directly addresses your requirements.

Value To You, Our ClientYou receive immediate cost savings from identification of errors, overpayments and renegotiation of supplier costs or selection of new vendors to reduce costs while always maintaining the quality you require.

3. Measured Results and On-going Savings Monitoring: Every month or three months we monitor and audit your savings while working with suppliers to assure that you continue to receive the best pricing. All savings are approved, documented and then implemented. Expense To Profit ensures all savings for the length of our agreement with limited or no price increases.

Value To You, Our Client You receive a complete analysis of organizational spending with recommendations on how to reduce your costs. We provide continued attention to costs and measurement of the savings – while your organization achieves the maximum savings.

Request a call for your FREE Cost Analysis Review.

Mission and Commitment

Our Mission is to partner with your organization to save you money. Our Consultants assess your spending and create a plan to reduce your non-labor expenses so that you can reinvest the savings in the growth of your organization.
 Our team of Cost Reduction Experts then get to work implementing that plan, showing you guaranteed results within 30 days.

Expense To Profit’s commitment is creating innovative solutions for immediate and long-term results. 

Once you partner with Expense To Profit, you will never be left alone.  Our support is available to you long after we have fulfilled the terms of our contract.  We are committed to leaving behind on autopilot sustainable savings solutions that reduce your costs into the future.

Our innovative programs and tools will further enhance your potential for cost reduction. A return on your investment is inevitable.

Request a call for your FREE Cost Analysis Review.