Telecom Billing Errors Are Bleeding Your Bottom Line

It's hard to imagine services more vital to your business- Although a mid-sized business had negotiated a fair
operation than telephones and data circuits. Yet therate for long distance calls that cross state lines, the
Gartner Group research firm identifies telecom ascontract did not address calls within its state - 85
among the most poorly managed functions in manypercent of its volume. Changing that one oversight will
organizations. "It is not hyperbole to state thatresult in savings of $125,000 this year.
networks and telecom are the worst managed- A Texas business learned it was wasting thousands
functions in I.T.," Eric Goodness, Gartner's viceper year by having data circuits under individual
president for managed and professional services, toldcontracts, rather than negotiating a master agreement
CIO Magazine.that reduced rates across the board.
Complicating already-complex telecom services areTHE GOOD, THE BAD AND THE UGLY OF
the mergers, bankruptcies, layoffs and generalTELECOM CONTRACTS
upheaval in the telecom world. It simply couldn't comeSigning contracts with your telecom providers can
at a worse time for businesses working to controldefinitely lead to lower rates. Unfortunately,
cost or adopt new commuication technologies.inexperienced negotiators often focus on price alone
TELECOM SURVIVAL TIPSand do not research contract terms and language that
A surprising number of telecom services are billedcan limit your choices and prove expensive in the long
incorrectly, so it pays to understand exactly what therun.
phone companies are charging you for. Some don'tKeep these factors in mind when considering any
make it easy. Phone bills filled with strange telecomagreement for voice or data services:
lingo, taxes, surcharges, and arcane service- In today's fluid telecom marketplace, it seldom makes
descriptions. On the other hand, even the largestsense to sign agreements longer than 24 months.
providers send bills that contain so little detail it is- Watch out for minimum annual revenue
impossible to tell exactly what you are paying for.commitments or discount schemes that lock you into
That's why there can be a big payoff in conductingspecific spending levels - and penalize you for falling
some dial tone detective work.short.
- Ask the phone company for "customer service- Make sure long distance agreements include
records" for each account. This document will listcompetitive rates for interstate and intrastate, or
every phone number you are being billed for, and alldiscounts that cover both types of calls.
the various features and surcharges associated with it.- Scrutinize all offers that require an exclusivity clause
Check it carefully for numbers you don't recognize.in exchange for low rates or high discounts.
Many businesses find they are still paying for modem- Insist on language that lets you upgrade to new
lines, alarm lines, or other services they no longer use.technology, such as voice over Internet protocol, with
- Look for potentially unnecessary services such asno penalties.
voice mail, call forwarding, inside wire maintenance, etc.BEING PROACTIVE PAYS
These services can add $25 per month to the cost ofMulti-location businesses often find themselves
a single phone line.challenged by the administrative burden of managing
- Check your bills every month for charges from USBI,large stacks of phone bills. Turnover among the
ILD Teleservices, HT Teleservices, OAN Services oraccounts payable staff frequently results in
ZPDI. These, and many other third parties, may beinexperienced or untrained employees being saddled
billing you inflated long-distance rates, sometimes aswith the unpleasant task of reviewing telecom invoices,
high as $3.75 cents per minute, or other fees forand then arguing with phone companies to correct
services you do not need.errors. With so much money at stake a growing
Even your trusted local phone company may be billingnumber of corporations are outsourcing management
you ridiculous rates for something called "local toll" calls.of telecom services. Some outsourcers charge a
These calls are typically to cities outside your freepercentage of savings they generate, typically
calling area, but still within the state. Charges of 36between 30-50%. Others work on an hourly rate,
cents per minute or more are not uncommon, evennegotiate fixed retainers, or a blend of both.
though you could be paying 90 percent less if yourIf you choose to keep telecom management in-house,
phone lines were included in a master long distancetake a hard look at your processes. Make sure every
agreement.invoice gets a thorough review by someone familiar
REAL-WORLD EXAMPLES OF BILLING GONE BADwith your telecom landscape and knows how to
- A regional Indiana bank was shocked to learn that itchallenge billing errors and unauthorized charges. Also,
was still paying hundreds of dollars a month for a T1insist that all telecom services be ordered through a
data circuit to a branch location. Why? The branchstructured process, and is recorded in a master
was closed and the building torn down two yearsdatabase. All changes must be communicated to
previously. The phone company refused to giveaccounts payable. Maintaining an accurate inventory is
credits because the bank could not document aimportant step to keep from paying for services you
request to disconnect the circuit.no longer use.
- Detailed analysis for a growing, acquisition-orientedBusinesses are learning the hard way that ongoing
business with 50+ locations found more than $1,500internal communication and proactive management are
per month in private alarm circuits to various policerequired to make managing telecom expense less
departments that were no longer being used.painful than that red-hot needle!