5 business costs you can minimize · carrier will not tell you when you’re being overcharged ......
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5 Business Costs You Can Minimize
Without Lifting a Finger
Presented By:
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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 406339
Jeremy Layton, Verisave
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5 Business Costs You Can Minimize Without
Lifting a Finger
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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 406339
Prepared By:Jeremy Layton, Verisave
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5 Business Costs You Can Minimize Without
Lifting a Finger
Telecom, Merchant Accounts, Freight, Utilities, Bank Deposit Fees
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Presented By:
Jeremy Layton, CEOVerisave, LLC
Cost Reduction Experts since 2001
Agenda
● Overview of ”Gain Share”
● Telecom Audits
● Merchant Account Audits*
● Freight Optimization
● Utilities Audit
● Bank Deposit Fee Audits
● Best Practices for Engaging these Firms
*Verisave’s sole focus is Merchant Account Audits
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Objectives
● You will understand the value of contingency fee cost
reduction audits
● You will understand how to create a significant savings
for your company with a minimal time investment
● You will recognize the value of working with third-party
experts without paying up front fees
● You will have a solid set of next steps for pursuing these
savings
Ask yourself:
What check do you hate writing the most every month?
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Recommendation: Don’t Do it AloneYou CAN achieve some of these savings on your own. But
your time and your team’s time is important.
The expertise required to audit many of these costs is
extensive, and it is not advisable to recruit for this role.
The ideal approach is to learn how to identify savings
opportunities at a high level, and properly prepare for a gain-
share cost reduction audit.
Myth:
A thorough RFP will achieve the lowest possible costs in
these areas of expense.
No, this is NOT the case. RFPs rarely address setup, pass-
through, or other fees not directly related to the service
provider.
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Gain Share Defined:
Gain share service providers are typically focused on
implementing a measurable savings for their clients. They
ONLY get paid a share or portion of those savings. Their fees
are entirely contingent on the client’s gain (AKA Contingency Fee Audits).
Any fees incurred are self-funded by the savings generated.
Benefits of Gain Share:● Provider is incented to achieve the maximum amount of
savings● Up-front analysis is typically completed free of charge● Engagement is low-risk (no obligation)
● Does not add an expense line-item
● Provider performs all of the heavy lifting● Most gain share services are comprised of seasoned
experts that are not available in-house
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Risks of Gain Share:
● Focused solely on activities that yield savings (may overlook
process efficiencies, etc.)
● Portion of the savings goes to provider
● Fee fluctuates month to month based on savings (not 100%
predictable)
● After end of contract, account could return to higher rates
Who is usually involved:
● CFOs and Controllers
● Treasurers
● General accounting teams
● Logistics teams
● Purchasing and procurement teams
Anyone who oversees these expenses
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One-on-one consultation:
There’s a lot to go over on this webinar. Let’s meet one-on-one to discuss in more detail how these services align with your specific business. Schedule here:
verisave.com/consultation
Poll Question # 1
Phone: 801-953-1515Email: [email protected]: verisave.com
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Telecom Defined:
Telecom refers to your phone and data plans, including service, support, and equipment.
Telecom Audit Guidelines:
● Usually working with CFO first and then the IT
director for implementation
● 35-50% Average Savings on these Fees
● No minimum spend for audit – most business telecom
setups can benefit from an audit
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Telecom Challenges:
● Keeping an updated Inventory – Data Lines, Phone Lines,
Circuits
● IT Teams Doing More With Less / Overworked
● Complex and confusing invoices, lack of transparency
● Carrier will not tell you when you’re being overcharged
Telecom Audit Focus:● Billing Errors and overcharges
● Identify and Collect Refunds for overcharges
● Identify non-used or unnecessary inventory
● Extension of IT team on these projects
● Industry benchmarks and provider database (knowing
hidden pricing and discount programs)*
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Telecom Case Study:
• Logistics Company• 50 Locations• Overcharges and unused inventory• Obscure discounts• $864k Annual Savings
Merchant Accounts:
Merchant Accounts refers to your credit card processing services and all related fees. Merchants pay an average of 3% to process credit card payments totaling over $180 billion in processing fees per year.
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Merchant Account Audit Guidelines:
● Guarantee $10k savings
● $50k or more in credit card volume
● 25-35% savings
Merchant Account Challenges:● Confusing Merchant Statements● Hidden Fees● Unpublished discount programs
● Visa/MC Rate Changes Every 6 Months
● Changing Processors is cumbersome
● Certain integrations may prohibit making processor or
software changes
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Merchant Account Audit Focus:● Interchange (Visa / MC Fees)
● AmEx
● Fee Errors / Overcharges
● Refunds
● Discount Program Implementation
Case Study:
● Law Firm Client
● $26k AmEx Refund
● $5k Ongoing Monthly Savings ($60k annually)
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Poll Question # 2
Phone: 801-953-1515Email: [email protected]: verisave.com
Freight and Logistics:
Freight and Logistics relate to shipping and receiving costs, using various carriers and freight services.
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Freight and Logistics Audit Guidelines:
● 15-25% average savings
● No minimum spend (most businesses can
benefit)
● $100k is where it gets interesting
Freight Challenges:● Complex invoices and lack of transparency
● Shipping lane and truck space do not have centralized
database
● Limited service provider options
● Impossible to determine if negotiated rates compare well
against marketplace
● Small parcel vs. LTL vs. Truckload guidelines not clear
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Freight Audit Focus:● Shipping Efficiencies are a primary focus
● Go to market with Like-for-Like spend, compare against
benchmark data – an industry expert is on your side
● Consolidation of providers
● Shipping lane comparisons based on proprietary
technology
● Timely purchasing of truck space
Freight Audit Case Study:● Food additive manufacturer
● Carrier Consolidation
● Shipping Lane Optimization
● $238k Annual Savings
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Utilities Defined:
Utilities include electricity, natural gas, water, sewer, and sometimes waste management.
Utilities Audit Guidelines:
● CFO gets involved
● 15-25% average savings
● $500k+ annual spend is ideal
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Utilities Challenges:● Some businesses use a lot more electricity, gas, etc.
● Limited service provider options
● Complex and confusing bills/statements
● Difficulty of managing accounts across multiple locations
● Rates constantly in flux
Utilities Audit Focus:● Ensure proper rate tariffs (government regulated)
● Purchase direct/wholesale when possible
● Identify refunds for overcharges
● Economies of Scale… multiple properties can sometimes
be combined into an aggregate for better pricing
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Utilities Case Study:
● Multi-plant tool manufacturer
● Aggregated spend
● $225k annual savings
Bank Deposit Fees Defined:
Bank Deposit Service Charges are common with most banks and affect a wide variety of banking activities such as check deposits, lockbox fees, payroll, and balance reporting services.
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Bank Deposit Audit Guidelines:
● CFO or Treasurer
● 20-25% average savings
● Not uncommon to achieve a $1million annual savings
● No minimum threshold, but $100k is a great baseline
Bank Deposit Fee Challenges:● Complex and confusing bank analysis reports
● Lack of consistency in language
● With interest rates near zero, bank has to make money
somewhere, so they charge it here
● No industry benchmark data to compare to
● Lack of consistency in fees within same bank
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Bank Deposit Fee Audit Focus:● Comparing all fees/rates against proprietary database
● Treasury efficiency recommendations● Benchmarks within the same bank the client is using: thousands
of banks represented in a patented system (updated weekly to
identify hidden pricing and discount programs)
Bank Deposit Fee Case Study:
● Client was being charged $0.09 per check deposited … but
other similar clients were charged $0.03 from the SAME bank
● Bank would not give straight answer until auditors brought
proof (benchmark data)
● $45k annual savings on that service alone, total annual savings
on all Bank Deposit services was over $1.2 million
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Poll Question # 3
Phone: 801-953-1515Email: [email protected]: verisave.com
What do these have in common
● Complexity of statements, lack of transparency
● Industry benchmarks are imperative
● All include fees outside of service provider’s scope
● Minimal time involvement by client
● Usually no upfront fees
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Audit Savings Summary
● Telecom Audit = 35% - 50%● Merchant Account Audit = 25% - 35% ● Freight Audit = 15% - 25%● Utility Audit = 15% - 25%● Bank Deposit Fee Audit = 20% - 25%
Preparing for an Audit● Determine total spend in any area of concern
“What checks do you hate cutting every month?”
● Gather statements and account history
● Alert internal stakeholders
● Schedule consultation with Verisave:
verisave.com/consultation
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The Ideal Audit Process
● Finalize game plan with Verisave
● Verisave recommends and introduces appropriate
audit firms
● Submit data/details to audit firms
● Receive a detailed savings analysis
● Sign savings agreements
● AUDIT FIRM will implement the savings
Additional Gain Share Audits
● Fleet Management
● IT Services
● Workers Compensation Fee
● Payroll
● Records Management
● Temporary Labor
● Packaging
● Print Procurement
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One-on-one consultation:
There’s a lot that we just went over. Let’s meet one-on-one to discuss how these align with your specific business. Schedule here:
verisave.com/consultation
Poll Question # 4
Phone: 801-953-1515Email: [email protected]: verisave.com
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Conclusion:These business costs are often
unavoidable and very difficult to reduce.
But Savings Can Be Achieved Through Expert Gain Share Audit
Firms
Ask yourself:What check do you hate writing
the most every month?
And consider: there are probably some checks you SHOULD hate to write but don’t think
about often …
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Book Consultation Call:verisave.com/consultation
Reach out to us with questions:
801-953-1515
verisave.com
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Notes
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