If you are a large corporation, restaurant chain, city government, school district, non-profit or some other sort of organization, there are ways to reduce your company phone bill. You know telecommunications services are critical to your success. They provide the direct connection to your customers and employees while also connecting to your security and safety systems, credit card services, fax machines and the internet.
Deciphering your phone bill gets complicated with so many services coming from your telecom/cellular providers. Rate structures are complex, and it’s an ever-growing expense that changes as quickly as the technology supporting it. The sheer number of moving pieces leaves plenty of room for errors on your monthly invoices.
7 Ways to Cut Phone Costs
1. Examine your invoices closely every month.
The first step to managing your phone and cellular bills is to know what you pay for. Look at your “Current Monthly Charges” and compare them to previous months. Set up a spreadsheet to monitor the line-by-line charges each month and help you spot aberrations that may cost you. If you see something unusual, question it right away. If you wait for it to work itself out, an erroneous charge can go on for months, even years—and that can affect your bottom line.
Watch for any changes to your billing such as a new line item or unknown service additions. Unless you are paying a large amount of long distance toll charges, your monthly bill for local service should not vary by more than 1-2% per month. (These slight variations result from changes in usage, fees and surcharge percentages.) Look for features you did not request, charges from third party billers, incorrectly billed surcharges or taxes that seem too high.
2. Ask for your Customer Service Record (CSR).
Depending on the size of your organization, your invoice may not include detailed information for every line and circuit. Larger accounts often require thick, multi-page bills that are expensive for your provider to print and mail. Instead the provider condenses the charges into broad categories that can conceal details on charges that can add up quickly. Your business or organization may receive a two-page phone bill, but your customer service record could be 100 pages. To get that detail, request your CSR.
3. Do your due diligence.
If you find a questionable charge, ask your customer service rep about it. If he or she says it is correct, but you are doubtful or don’t feel it was explained well, politely hang up. Then call back and talk to another rep. If you still feel you aren’t getting the right answers, ask for a supervisor. Be prepared to explain why you think the charge is wrong, and push for more answers. Remember that all reps are not created equally: Their ability to answer your questions is variable and depends on their training, experience and tenure with that provider.
4. Find the tariff online and get familiar with it.
A tariff is a collection of rules that defines the relationship between a utility—in this case a telecom carrier—and its customers. Your carrier must follow the rules of its own tariff. These rules are designed to protect you from discriminatory practices. They define rates, service area, allocation of costs for various services, requirements for new customers and other details.
Be forewarned that tariffs are long, detailed documents that change periodically. You’ll need to weigh whether this is good use of your valuable time. Staying on top of your invoices and thousands of line items takes time and expertise. Cost Control Associates recommends a periodic review of invoices every 2-5 years. An outside consultant will often do this work on a contingency basis that can save you money.
5. Revisit your rates and plans periodically.
Proactively pursue the best rates. Once an organization gets its phone system and contracts put in place, everyone moves on and goes about their daily business. Time passes quickly, and it’s easy to take your rate and service contracts for granted. A rate quoted two years ago may have been good at the time, but due to the many changing variables in telecom contracts, it may not be as good now. Ask your provider where you might save money through lowered rates, better values and newer upgraded services. You might also consider moving to other technologies such as VoIP which offers a flat rate per month or a reduced pay-as-you go plan.
6. Consolidate or eliminate services.
Many organizations unknowingly pay for services they don’t need or use. Do you have empty offices with phone extensions that are rarely used? Do you have services you don’t really need such as conference calling, ring groups, call distribution queues, virtual lines and a virtual receptionist? Is “hold” music important to you? Talk to your provider about eliminating some of these services. Before you remove any services, carefully weigh your current and future business needs. Customers are not happy when they experience dropped calls, long hold periods, inefficient call routing and inadequate voice mail options.
7. Don’t let your contracts gather dust.
Be aware of what your phone and maintenance contracts say. Know when services begin and end and if there are special rates that are good for a finite period. When special deals or packages end, rates often shoot up, and you may have no recourse if it is not outlined in your contract.
Do not count on your vendor’s account team to notify you when your contract is up for renewal. If you miss the renewal date, you may discover a high fee on your next invoice. Another risk is that your contracted rate may end. Though you may get a month or two at the prior rate, your new pricing might double or even triple your former rate.
If you are within 3-6 months of your renewal date, you may be able to negotiate new lower rates. This can be easier if you haven’t already reached your original contract’s expiration date. Being proactive on your account can help you reduce your company phone bill—and it will save you frustration and billing issues down the road.
If you don’t have time or don’t know how to get started, Cost Control Associates offers a free analysis to show how you may be able to reduce your company phone bill. Send us your most recent invoice, and we’ll tell you if there’s a likelihood for savings. There’s no commitment and no cost.
Keith Laake founded Cost Control Associates, Inc. in 1991 and has been responsible for strategic planning, marketing and sales, and overall management of the firm. He currently focuses on business development. Keith received his BBA from the University of Wisconsin and is a certified public accountant. Learn more.