5 business costs you can minimize · carrier will not tell you when you’re being overcharged ......

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

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

1

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

3

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?

4

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.

5

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

6

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

7

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

8

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

9

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)*

10

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.

11

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

12

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)

13

Poll Question # 2


Freight and Logistics:

Freight and Logistics relate to shipping and receiving costs, using various carriers and freight services.

14

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

15

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

16

Utilities Defined:

Utilities include electricity, natural gas, water, sewer, and sometimes waste management.

Utilities Audit Guidelines:

● CFO gets involved


● $500k+ annual spend is ideal

17

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

18

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.

19

Bank Deposit Audit Guidelines:

● CFO or Treasurer


● 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

20

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

21

Poll Question # 3


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

22

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:


23

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

24

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:


Poll Question # 4


25

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 …

26

Book Consultation Call:verisave.com/consultation

Reach out to us with questions:

[email protected]

801-953-1515

verisave.com

27

5 business costs you can minimize · carrier will not tell you when you’re being overcharged ......

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