- SPECIAL REPORTS
- THE MAGAZINE
I can say one positive thing about this recession: It definitely has us relearning the value of money. As my partner and I recently reviewed some accounts payable, we were astounded to find that we were being charged for all sorts of things we didn’t order or didn’t expect. We shared some quick stories and have concluded that these charges are not mistakes; rather, they are connived overcharges that most likely affect millions of people. (Incidentally, I looked up "overcharge" on Dictionary.com, and some of the synonyms are cheat, fleece, overburden and rip off.) I wanted to share our experiences in the hope that readers will check their invoices.
One example is that an overnight delivery company recently invoiced us $60 to send a two-page letter. We had expected the charge to be around $15. When we called the company to inquire about the fee, we were told that the default charge on any package had been changed several months ago from a letter to a five-pound package. The company had changed this default without notifying its customers. Can you imagine how many people use the default charge nationwide every day? That adds up to some significant revenue.
Next, we looked at the office telephone bill. Understand that this is from a phone company that has changed its name three times in the past few months. Considering that the company has to repaint all of its vehicles (of which there must be thousands nationwide), reprint its letterhead, revise its Web pages, and pay numerous the attorneys and accountants to oversee all of the changes, the cost to us, the captive customer, must be monumental.
But back to the bill. In addition to the legitimate charges for local phone service, the statement shows DSL charges and miscellaneous fees and taxes. In the past, we always trusted these “institutional” invoices since they were from large, respectable firms. We were under the impression that, due to the phone company’s size, there must be some sort of oversight on what they could charge, and it wouldn’t pay to question fees that were essentially government mandated and totally out of our control. Again, however, we were sadly shocked. We found about $100 per month in frivolous fees for services we didn’t want and had not ordered.
For instance, we learned that we were being billed for software-from the phone company! When we called to ask about this charge, we were told that it was from another firm that was allowed to piggyback on top of the telephone bill. The fee was for antivirus software that scans our emails before they’re forwarded to us. When we told the representative that we didn’t want this service and, indeed, had not requested it, the representative gave us the name of the person at our firm who had “ordered” it. Curiously, that person never worked at our company.
We asked that the fee be removed and were told that the phone company couldn’t do that since the other firm was piggybacking on its bill. Instead, the rep provided the contact information for the other company. We then had to make another call and spend another half-hour on hold and speaking with various representatives to request that the charges be removed. We were eventually credited with six months of charges-but that was as far back as the company would go.
Another fee on our telephone bill was for a listing on a yellow pages Web site. Again we were told that this has nothing to do with the telephone company, and again we had to make a separate call to have the charges removed. Yet another fee was for long-distance services, which was both odd and incorrect since we had another long distance provider with a completely separate account.
As we continued to scrutinize the statement, we also found that we were being billed for “features” on the phone such as call forwarding and caller ID that we never ordered and, in fact, did not work. To be honest, we hadn’t reviewed the phone bill in years. Our thinking was that the charges were clear cut-you make a call, you get a bill. Not true!
Our office administrator came in while we were discussing these charges and told us of another scam she had noticed. A service person had called representing our copier and asked for the serial number on our machine. Thinking it was for a recent service we had, our office administrator provided the information. Within a few days, we received a couple of cartons of toner along with an invoice. Of course, this toner had never been ordered.
Not long after that discussion, we noticed an invoice for a subscription to a mechanical CAD magazine. The invoice was addressed to accounting and appeared to be legitimate. But we aren’t even in the mechanical business, and the subscription was never ordered. The invoice was for $8.99 per month-a trivial amount that likely wouldn’t set off any alarms at most companies. I wonder how many accounting departments might just pay that bill without digging further into it?
We encountered another sneaky overcharge during a training class that we performed out of state. We had contracted for a meeting room with tables and chairs set up classroom-style. Our contract specified water and coffee service along with power for the laptop computers, and we paid for everything through our corporate office ahead of time. When our instructor arrived, he discovered a whiteboard and an easel in the room, along with donuts, bread and bagels on the table with the coffee. He assumed (yeah, I know) that these amenities were being provided for us. When he checked out, the hotel asked him to pay for these extras. In the rush to catch his flight, he didn’t have time to investigate these charges so he paid them. Fortunately, the hotel refunded the money after we complained.
Well you get the idea. Without even trying, you might find that you can save your company several hundred dollars a month simply by reviewing your invoices and checking your expenses. This might be a standard practice in many firms; however, I know from personal experience that it can be easy to let these details slide when things get busy. That is one thing that we changed in our company for 2010, and the effort has already paid off.
Has your firm been able to save money by scrutinizing its payables? If so, please share your experiences below.