The Bill Auditing Process

INTRODUCTION

The growing complexity of business telecommunications has resulted in a significant increase in the number of invoices received by the average organization. As an expanding array of telecommunications services continue to be purchased, the costs keep edging up. At the same time, the expertise needed to validate the accuracy of these bills is in short supply and rarely available as a part of your in-house staff.

Many organizations have different departments approving different types of telecommunications bills with bills for voice communications separated from those for data communications. This decreases the likelihood that there is ongoing accurate validation of these costs is taking place.

Your Telecommunications Services include:

• Voice Communications: Local Telephone Service (outside lines & calls); Long Distance Telephone Service (outside lines & calls); Incoming 800 Service; Calling Cards
• Data Communications: Circuits and Usage for Computer Network Communications; Internet access
• Wireless Communications: Cell Phones, Pagers

The growing variety of services and of companies who provide them, along with the continuing deregulation of telecommunications pricing has dramatically increased the likelihood of incorrect billing. When telecommunications service providers merge and attempt to consolidate incompatible billing systems, instances of billing errors escalate.

A Telecommunications Bill Audit validates the accuracy of your bills to ensure that:

• The rates you’re being charged comply with the contracts you’ve signed with your service providers.
• The rates comply with applicable telecommunications tariffs.
• All discounts and credits to which you are entitled have been correctly applied.

The services for which you are charged are actually in place. DIgby 4 Group, Inc. provides Telecommunications Bill Audit Services and maintains resources with the expertise to identify incorrect billing. Our Auditors’ knowledge and abilities have set precedents for telecommunications bill refunds that we will apply to your audit wherever possible. We have both the experience and the diplomatic skills needed to effectively negotiate maximum refunds for past over-billing.

The fee for the Telecommunications Bill Audit is based on a percentage of a refund. This type of arrangement, known as a Contingency Fee, acts as an incentive for our Auditors to focus on the areas where the likelihood of error is the greatest. A Contingency Fee also places no financial obligation upon your organization. If we do not find billing errors there is no charge for our service.

The average Telecommunications Bill Audit results in a refund equal to 15% of your annual telecommunications expense.

The Audit takes up a minimal amount of your staff’s time. The end result will be an improvement in your ability to manage Telecommunications costs going forward.

THE PROCESS

1. What We Need to Get Started

• A signed DIgby 4 Audit Agreement.
• A Letter of Authorization enabling us to speak to your service providers on your behalf.
• The name of our point of contact within your organization.
• Telecommunications Bills (a complete copy of one representative month).
• Copies of Telecommunications Contracts with service providers (both in those in effect and those that expired within the past three years).
• Billing Detail from your Local Telecommunications Service Provider (a Customer Service Record) if you have it. Otherwise we will request a copy on your behalf.
• The names and telephone numbers of your telecommunications service provider representatives. We suggest that you contact them first to let them know that we will be in touch with them.
• Any documentation on telecommunications services you maintain in-house including telephone directories, circuit lists or billing account lists.
• Copies of correspondence (letters, e-mails, faxes) documenting the ordering or removal of telecommunications services.
• Records of telephone calls ordering or removing telecommunications services including dates, order numbers, name of person placing the order and the monthly charges to be added or deleted.

2. The Initial Assessment

To make the best use of your time and ours, we conduct a preliminary assessment of your telecommunications services, suppliers, contracts and associated expenses. This profile enables us to identify the areas with the greatest potential. We will review this with you and recommend the best strategy for approaching the audit.

3. The Start-Up Report

DIgby 4 prepares a spreadsheet showing each telecommunications bill to be included in the audit along with the account number, service provider, type of service purchased, date of bill and amount of bill. The total provides an estimate of the monthly spending to be reviewed. This spreadsheet also serves as a basis for Status Reports as the audit moves forward.

We also prepare a list of all other information and documents provided to us and describe any open items.

4. Management Support Letter

When the audit begins, we obtain a brief letter from a senior manager of your organization in support of the audit to be submitted to senior management of your telecommunications service providers. This improves the likelihood that when claims for refunds are submitted, they will be resolved in a timely manner. When significant refund potential is identified, service providers may slow down their response or fail to respond at all. Having the audit acknowledged at a higher level in the organization helps to prevent this.

5. Request for Billing Detail from Your Service Providers

Telecommunications bills frequently lack the level of detail we need to begin the audit. If this is the case, we contact your telecommunications services providers to request this billing detail. For example, every telecommunications circuit, whether used for voice or data communications, has multiple billing elements that make up the circuit charge, but these are not shown on the typical monthly bill.

6. Contract Compliance Review

Telecommunications service providers request that you sign a contract to purchase services. These contracts either provide rates that you will be charged or make reference to tariff rates from which you may be receiving a different percentage discount for each different type of service you are purchasing. The tariff referenced in your contract is not provided to you.

The contract may also reference credits that are to take effect when certain call volume criteria are met or at specific points within the contract period.

We note any ambiguities or contradictions in the contract language and develop questions for the telecommunications service provider. As we progress through the audit, we continually refer back to the contract.

7. Tariff Compliance Review

We maintain an historical library of telecommunications carrier tariffs covering the past 10+ years. In many cases you can no longer request these documents from your service providers.

We also subscribe to an on-line rate and tariff service, enabling us to research rates from any major telecommunications service provider. We check the rates on your bills against all applicable tariffs.

As with contract language, tariff language is often ambiguous and contradictory. Our experience enables us to bring this to bear on your behalf, with significant refunds often resulting.

8. Discussions with Your Telecommunications Service Providers

Once we have completed the initial contract and tariff review, we will contact your telecommunications service provider Account Executive. From there, we may be put in touch with billing or contract specialists to obtain answers to our questions.

The success of the Telecommunications Bill Audit can hinge upon your willingness to get behind us should we uncover a case of significant over-billing. If the service provider thinks that there will be no consequences, they may try to ignore our requests for refunds.

9. Records Validation

To ensure that all telecommunications facilities for which you are billed are actually in place we identify records of on-site telecommunications facilities against which the bills can be validated. If needed, we send our telecommunications technician to your site to conduct a facilities inventory. This is scheduled in advance at your convenience. If you have an in–house technician, we may request that he be present or available when we visit to respond any questions we may have.

10. Requests for Additional Information

Once we have completed our initial review, we may discover that pertinent information was not obtained in the data collection. For example, during our inventory, we may find a group of outside lines for which we have no telecommunications bill, so we will provide the line numbers to you to see if a bill can be located.

11. Submission of Claims

Some errors may be readily apparent. In these cases we assign a claim number to the error and submit the claim for over-billing to the service provider. When we provide you with a Status Report you will see claim numbers, the service provider to whom they have been submitted, the date submitted, the nature of the billing error and the potential amount of the refund. Other claims may be to question items that may ultimately turn out to be errors, but need further investigation. In some instances, the refunds we obtain on your behalf will be due to an interpretation of ambiguous or contradictory language in a contract or tariff. Some of these may be based upon precedents that our auditors have established on previous audits. In these instances, a considerable amount of negotiation, either in person or by telephone, is typically needed before the service provider agrees that there is a billing error. Some claims are submitted for errors as they are uncovered within the contract and tariff review periods. Other claims result from errors found during the records validation process.

12. Telecommunications Service Provider’s Site Inventory

In some instances, after we have submitted a claim stating that circuits on your bill are not in place, the telecommunications service provider conducts its own site inventory to verify this. If the claim is for a significant amount, we may send our representative to be present at this inventory to ensure that lines we did not find do not mysteriously reappear or lines that we found to be not working are repaired.

13. Claims Monitoring

Once a claim for over-billing has been submitted to your telecommunications service provider, we establish a rapport with the individual who is responsible for approving the claim and computing the amount of the refund. The amount of the refund is in part dependent upon the relationship we have established with this representative.

We keep in touch with the representative on a regular basis by telephone to ensure that the claims we have submitted are moving forward. Most providers of local telecommunications service have a separate division (usually a small group of people) that we work with on these claims. They typically have a considerable backlog, so there can be a delay between the time we submit a claim on your behalf and the point at which the claim is acted upon. In the case of a claim submitted another carrier of voice or data communications, we submit the claims to your Account Executive who may, in turn, relay them to your billing representatives.

Once we are advised that a claim has been accepted and a refund is pending, we will report this to you. We review the computation used to arrive at the refund amount and provide you with an estimate if we are reasonably certain of the amount.

14. Receipt of Refunds

A refund may be in the form of a check made out to your organization or a credit on your bill. We attempt to obtain a check since this tends to be preferred by corporate managers. In some cases there will be a refund check with additional amounts credited to a bill. The check or copy of your bill showing the credit will be sent to us. This is the point at which we prepare and deliver our invoice to you and submit it along with the check or copy of the credit, along with a brief explanation of the basis for the refund. DIgby 4’s invoice is payable at this point.

15. Identification of Other Cost Reduction Opportunities

Usually a refund also results in a monthly cost reduction when your bill is corrected. If we observe other telecommunications cost reduction opportunities outside the Scope of this proposal, we will bring them to your attention for further discussion.

16. Status Reports

After the initial Start Up report, we will provide you with regular status reports. In between status reports, we will call you if we need additional information or if a refund is obtained on your behalf. The nature of the audit process is that there may be periods when nothing is happening, as we may be waiting for a response from your service providers on claims or questions we have submitted. Once a refund has been agreed to, there may also be a period of time before the actual check or credit is received.

The Status Report will show the results of the audit to date in terms of refunds and pending claims for refunds.

17. Final Report

An audit may take six months or can continue for several years or more depending upon the complexity of your billing and the errors found. When we believe your audit is complete, we will prepare a final report summarizing the results and showing the amounts of refunds and associated savings achieved on your behalf.

18. Recommendations for Telecommunications Expense Management

We may make recommendations for the ongoing Management and Control of Telecommunications Expenses as the Audit progresses.

FEES
Our fee for this work is contingency based on a percentage of refunds:

• 50% of all refund amounts
• Refunds include taxes and interest charges

If we do not obtain a refund, there is no charge for this service. If you would like to arrange a Telecommunications Bill Audit for your organization or if you have further questions, please call us at DIgby 4 Group, Inc., 212-883-1191 or Click Here to Email Us

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