"The World Is Flat" by Thomas L. Friedman is a must read if you want to begin to understand why General Motors announcements of serious financial trouble can lead to the Stock Market just ignoring this massive problem and stock prices rise.

If you want to thrive in this NEW ECONOMY you must adapt as fast as the economy is changing.  The very recent connecting of Billions of People throughout the world has changed everything.

 

YOU MUST WATCH EVERY PENNY!

How can I watch every cost and make sure there is minimal waste?

Customized Data Base of Services

The first step is to find a tracking data base and input all relevant payables.  The second step in the process is to inventory all services and to obtain copies of the current agreements with the vendor(s). 

Following up on expiration dates, agreed to pricing and just vendor contract terms is a complex process made simple with the right type of tracking data base.  The information must be accurately keyed into a tracking data base with the relevant fields filled in so that following up will become automatic.

Watching Prices and Accuracy of Charges

Once the data base of information is established and not less than every six months, items that add up to over $500/month must be checked with the market place pricing.  Three quotes are essential to determine the best possible prices.  Also, the Internet is a big help for research.

All purchases that exceed $3,000/month must be compared to agreed to pricing schedules on a item to item basis.  If the invoicing systems do not enable price checking to take place in an efficient manner, require the vendor to either change the format or deliver the invoice information in an electric format.  If that is not possible change vendors.  Confusion on cost per item will yield overcharges in many cases.

Shortage of Resources to Save Money

In today's world human resources are limited.  Cost reduction projects must be cost effective.  Outsourcing some of the functions with proper monitoring is very efficient.  Grunt work, setting up the data base, monitoring of the costs and just having an outside professional opinion with cross industry knowledge, will maximize savings.

 The Art of Negotiating

• Be rested and relaxed.

• Make sure you are not hungry.

• Never go to a meeting unless you know what you want.

• Work on negotiating strategies prior to the meeting.

• Arrive early so that you are not stressed by traffic delays and/or phone calls and/or other meetings.

• Know about the product or service and understand the specifications.

• Read and understand prior vendor/service agreements that covered the product or service being negotiated.

• Insist that the potential supplier reduce its price.  If this is not comfortable have someone else do it.

• Understand the fine print and do not agree to anything that you do not understand.

• Make sure the new price, terms and conditions are easy to verify and validate.

Validate All Promises

When the first set of invoices arrives, after negotiations are completed and the new program is in place, check each item against an agreed to price list and/or agreed to discount formula and verify that all terms and conditions have been implemented.

It is very common, on new agreements, that the agreed to terms and conditions are not properly implemented.

This causes overcharges and enables the vendor/service provider the excuse that the initial implementation was not done correctly.  If this is not fixed the vendor/service provider can get away with over charges for days, months and possibly never get caught.  This becomes very costly.

It is extremely rare that the vendor/service providers have a system in place to correct overcharges.  The bigger the company the less likely that the vendor/service provider will correct over charges automatically.

 

ATI has systems, templates, data bases and trained Staff to accomplish cost effective price controls.  ATI's cross industry experiences over 15 years has enabled ATI to save its client's over $50,000,000 and to become a leader in cost reduction and profit recovery services.  Our programs are based on contingent fees that enable our clients to save money without having to budget for the ATI services.  Our unconditional promise to you "no savings no fees are due ATI."  Please call us for additional information that will enable you to substantially reduce your costs at no risk to you.

We hope you will look forward to the Communicator and would appreciate any feedback that you would like to provide. 

Please email comments to dc@auditbills.com

ATI Cost Reduction & Profit Recovery Services

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