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There’s Gold In Them Thar Bills

June 3, 2010

Money is all around us; it’s just that we keep spending it and cannot seem to hold on to much. Any realistic, money-saving tips that come our way, therefore, are worth their weight in, well, gold.

Yesterday’s talk at the Irish Computer Society on Cost Control for IT Managers* had just that — some concrete advice on how to reduce expenditures by looking at non-payroll overheads. Given by Fintan Swanton of Expense Reduction Ireland (ERI),  the seminar zeroed in on two areas IT Managers should be able to make a quick impact: electricity and phone charges.

power buttonHis first piece of advice is no surprise: Shop around. Swanton said he phoned around earlier this week, and Energia, Airtricity and Bord Gáis are offering to beat the ESB‘s prices by between 10 percent and 12 percent for commercial customers. Swanton also recommended watching electricity prices after Oct. 1 because the energy regulator has decided that the ESB is free to set prices for commercial customers. Ironically, observers expect this to result in lower prices for business.

The second piece of advice is to understand your bills. Some customers may be paying extra because they exceed maximum agreed usages. Known as the Low Voltage Maximum Demand, Swanton said this clause “constantly trips people up.” Two common reasons companies end up paying is due to moving location or expanding. He said one ERI customer with 17 sites ended up saving €10,100 a year after they reconfigured their allowances.

Low Voltage Maximum Demand is one of the tariffs for commercial electricity customers. It includes charges for capacity – in essence Maximum Import Capacity (MIC). This is the maximum current you can draw from the grid and the MIC  is set in the connection agreement. You have to pay per kVA of MIC, so if it is set too high, you are paying for capacity you’re not using, and if it’s too low, you can incur substantial penalty charges for exceeding it. There’s more detail here on the ESB website.

Assuming people are still making profits and want to reduce them for tax purposes, Swanton said qualified, energy efficient, capital  equipment can be written off in one year. This includes HVAC, BEMS, lighting and IT equipment.

phone iconOn voice, Swanton’s advice was similar. Shop around and keep an eye on your bills. He suggested keeping away from fixed-term contracts due to the amount of competition in the market. His experience was that savings of 25 percent can be found. While providers will offer discounts on call rates as an incentive to switch, smaller discounts are available on line rental. They are not offered, so you will have to ask, he said.

Swanton said ERI is always finding unneeded items on phone bills. These can include line redirection, obsolete equipment and unused lines. He warned, however, not to disconnect lines that appear inactive in case they are needed for alarms or incoming faxes.

Phone bills can be a treasure trove waiting to be reclaimed. “Invoicing errors are extremely common,” Swanton said. The Aberdeen Group estimates between 7 percent and 12 percent are wrong. Swanton said his experience was at the higher end of that range, and few, if any, are in the customer’s favour. Some examples include:

  • Being charged the wrong rate
  • Paying a minimum call charge
  • Failure to disconnect line as requested
  • Rental charges on equipment not in use
  • Charges for discontinued data services e.g. X.25
  • But his favourite is being invoiced for “items the carrier cannot explain.” He told of how one customer’s bill had an alphanumeric entry. They rang the carrier and they could not explain the charge. After many calls and a lot of time, ERI recommended not paying the charge unless the carrier could explain it properly. It was dropped without explanation.

Other suggestions on tackling phone bills include:

  • GSM gateways for mobile
  • Prohibiting directory enquiries; use the internet instead
  • SIP for teleworkers
  • Consolidating mobile devices to one carrier
  • Reviewing bills to eliminate excessive personal use

It was a good seminar. There was a lot there and it is not easy to do justice to it in a short blog posting. But, it would appear based on ERI’s experience, that many organisations are failing to fully claim their savings.

* ICS members can see a video of the whole talk by following the link on the events page.

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2 Comments leave one →
  1. June 4, 2010 5:31 am

    Ethics is an anachronism?

    How to increase revenue: add a bogus item to every invoice.

    Oh, what do you mean they’ve already thought of it?

    • June 4, 2010 8:27 am

      Pat,
      You are very cynical today 🙂
      I don’t mean to suggest all billing mistakes are premeditated, alternative, revenue-enhancing operations. It does happen, as do genuine mistakes. In either event, I am sure we both agree on the importance of reviewing and understanding your bills.
      John

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