Find the Best Mobile Phone Solutions with Auditel

According to Ofcom, “A whopping £4.8 billion is wasted every year by customers being on the wrong tariff.” Why should this be? Why are so many customers apparently on the wrong tariff?

Established in 1994, Auditel, the premier cost and purchase management consultancy in the UK and Ireland, offers their experience. In this complex marketplace with a huge array of suppliers, tariffs, add-ons and equipment, it is clear that businesses find it extremely difficult to discover the most effective cost solutions. Laurence Knott, their Head of Marketing, says: “These days, we find that many of those responsible for purchasing decisions are turning to outsourced independent cost management networks like Auditel to help them. Mobiles are one of those areas where we are working with all of the industry’s major players.”
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How to reduce your Water costs

The imposition of hose-pipe bans in large parts of the country has highlighted the underlying problem regarding the need to better manage the UK water supply.    The Water authorities are tasked with reducing leaks in the infrastructure in order to reduce wastage, although this is partially funded by above inflation increases in water charges.

The water industry has been theoretically deregulated in England and Wales, in reality there are no alternative suppliers to the regional water companies, and therefore it is impossible to switch suppliers to obtain better terms, unlike the other utilities.

The alternative is for businesses to look for measurable savings in their water charges by implementing the following strategies:
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Check Your Bills – You Never Know What You Might Find

All of us are guilty of not checking our bills thoroughly, take telephone bills for example. Each month they send us pages of itemised phone calls. When was the last time you checked that the rate charged for each call was correct? I would guess never. However you may check occasionally once you’ve read the below story.

In December one of the UK’s major telecoms networks* (they’re the ones that provide the infrastructure that underpins the bills you’ll receive from your Telecoms Service Provider**) had an outage. The effect of this was that the Service Providers billing platform thought that there were some very long phone calls, for example one lasting up to 35 hours at a cost of £125. That was the worst one seen by an Auditel consultant, but there may be others that were higher.

The error above was quickly refunded by the Service Provider without quibble, due to the nature of the relationship we have with them, but if the bills hadn’t been thoroughly checked the error wouldn’t have been spotted at all.

If you had spotted the error yourself would the call centre operator at your Service Provider have a) understood the issue and b) refunded it on the spot?

Do you have time or the processes to check your bills every month, then to the time to sort out the issue via a call centre in the Philippines (or other part of the world where English isn’t their first language)? If your telephone bill is several thousand pounds per month would you notice if it was £125 higher than it should have been?

* = BT Openreach, C&W, Gamma for example

** = Daisy, BT Retail, Talk Talk, Alternative Networks for example

Extra Stationery Discounts for Charities not always of value

We were recently delighted to be asked to review the stationery expenditure for a large UK based charity.  With over 35 sites and an annual spend of over £170k on stationery this certainly was an interesting and challenging project.  Our team entered over 3,000 individual line orders into our software for us to analyse the charities spend.

We have often said that the “devil is in the detail” and this project certainly showed that.  When we reviewed the overall spending patterns we were surprised to see that despite the client previously negotiating a special “Charities rate” for some sites, the discount level applied by the supplier for these was less than that given to other sites in the group which were not flagged up as charitable status. Effectively meaning they could buy cheaper if they did not ask for extra Charities discount !

This only came to light as our specialist software allowed us to review prices and tariffs between sites.  Thankfully, having identified the issues we were able to move the charity to a new supplier, with a fixed core list, offering savings of 30% compared to their previous supplier.

If you have any concerns about the value you are currently receiving from your stationery supply we would be delighted to discuss ways with you in which may be able to reduce your total cost of purchase.

Beware the contract rollover

There was an excellent piece in yesterday’s Mail on Sunday (The Enterprise Zone) about White’s Seafood and Steak Bar in Hastings which had received a letter from British Gas the previous month warning that their energy contract was soon due for renewal and that failure to terminate the contract within a 3 week renewal window would see them rolled over on to a two year contract at a kWh rate 47.7% higher than their current contract. With an annual usage of 76,000 kWh this would mean an additional £3,200 a year. That’s an awful lot of fish suppers!

British Gas had, however made an error as the business should have been classed as a micro-business as it has fewer than 10 employees. Legally, suppliers can only roll micro-businesses on to contracts of 12 months at most. White’s has, unsurprisingly, terminated its contract and taken its business elsewhere.

This point aside, the important thing is that the proprietors of White’s actually read the letter that they were sent and acted on its contents. I see so many companies who ignore these letters (and let’s face it some seem to be deliberately designed to look as boring and uninteresting as possible so that they get binned or filed as just another peice of junk mail) and then are startled to discover the new pricing that they are landed with which can include huge hikes in both standing charges and the energy cost. At Auditel, of course, we diarise contract renewals so that our clients never get caught out by this sort of thing.

Burn more gas to save money? (Take or Pay clauses)

A strange question at first sight, however quite a pertinent one due to the warmer than average winter we’re having and the implications this can have for some business energy contracts.

Many energy suppliers, particularly Gas, include in their contracts something known as a ‘Take or Pay’ clause giving pre-determined upper and lower limits that your consumption must fall within in order to avoid what are usually fairly punitive charges. i.e. Take what you’ve contracted for or Pay for it anyway.

The pre-set limits are based on your ‘AQ’ – this should be your average consumption over the previous 3 years or so. However we’ve often found this industry database figure to be wildly inaccurate and should be checked against your predicted consumption before accepting any contract. Your AQ becomes your contractual 100% of consumption and the limits are a percentage either side of this, with the limits differing from supplier to supplier.

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If it’s the same as last month it must be right – think again! (To the tune of £210k refunded)

A question for all those responsible for the payment of an organisations energy invoices:

Are you sure that you are only paying for the energy that you consume?

The reason I’m highlighting this is because we recently discovered that a new client of ours had been paying 900% over their actual consumption level for over 6 years on a gas supply! Despite the huge ongoing additional cost that this added to their overheads, the spend had seemingly not been so much as questioned, never mind investigated in that time. A new FD spotted something was wrong and managed to get £80k back themselves, however he recognised that he needed expert help to check if £80k was correct or not and at this stage brought us in, in much the same way that you would bring in a Tax Specialist

As it is the total refund came to over £210,000. This on an energy supply that should – on a competitive tariff at today’s rates – be costing in the region of £7,000 to £8,000 per year (and much less in previous years). A huge additional cost for an SME to bear, particularly in today’s financial climate.

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Threat to Big Four highlights value of Auditel’s service

The Big Four Audit firms are potentially under threat from draft EU proposals published this week which will force them to abandon their consultancy businesses and share their audit work with smaller rivals.   Although this is unlikely to affect the majority of SMEs there are some interesting themes emerging which are relevant.

Apparently FTSE100 firms on average change their Auditors once every 48 years (and some multi-nationals have not changed for over a century according to the FT).   The current status quo does not address the threat of familiarity that results from re-appointing the same audit firm for decades and the independent view that is required could easily be compromised by this close relationship.  This has not only stifled competition but has compromised the ‘ethos of scepticism’ of the accounting profession vis-à-vis their clients.

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A Dynamic Approach to Managing the Cost of Doing Business

Auditel Host 11th Supplier Conference and Exhibition, Whittlebury Hall, Northants

On Friday, 13 May 2011, Auditel, the UK’s largest independent cost and purchase management consultancy, will be hosting their 11th Supplier Conference and Exhibition at Whittlebury Hall near Towcester, Northants. Auditel recognises the importance of proper relationships with the right type of suppliers and partner companies for the exhibition include; EDF Energy, British Gas, Shell LPG, Travelex, Bluefin Insurance Services, Accept Cards, UK Telco, Scottish and Southern Energy and NatWest Mentor.

Established in 1994, Auditel is currently saving millions of pounds for over 3,300 organisations nationwide through their unique Total Cost of Purchase® model. Their services now cover the full spectrum of business expenditure, supported by strong, but independent, supplier relationships and the wide-ranging, top-level experience of over 190 cost and purchase management specialists.

Auditel’s Managing Director, Chris Allison, says: “For over a decade, we have provided this forum for suppliers of products and services to our clients, giving them the chance to meet our Consultants, exchange ideas and explore new opportunities to service our ever-increasing client base. This year, it will be even an even bigger and better event than before. Thirty five market leaders will be presenting their unique offerings to our largest ever gathering of cost and purchase management specialists under one roof.”

“This year, the theme will be ‘A Dynamic Approach to Managing the Cost of Doing Business’. Together with our partners we will demonstrate how businesses can take advantage of the current economic climate, to prepare for better times ahead, emerging stronger than before.”

Paper prices rise steeply

We’ve just received an email from our stationery supplier notifying us that our contract price for 80gsm paper will be rising between 8%-12% from 1st October, with the prices of other stock going up by even more. This isn’t entirely unexpected, we’ve heard rumblings about the inevitability of sharp price rises all year, but it’s unwelcome nonetheless. The reason for the price hikes, apparently, is a set of unprecedented market conditions: a combination of decreasing volume year-on-year, challenging exchange rates, increased pulp prices and lower selling prices for cut paper across Europe compared with China and the USA mean mills are constricting  supply to Europe, pushing prices up. And it seems our suppliers expect the situation to continue until at least the end of this year.

The result, of course, for any business using paper – and I would guess that means pretty much any business of any size – will be a bigger stationery bill at the end of every month, unless they take steps to mitigate the higher prices. In the immediate short term, the quickest results would come from enouraging staff to value paper more highly – not easy when it’s been seen as such a cheap and disposable commodity for so long – by, for example, setting their printer to duplex (double-sided) printing as default, or by saving/filing their emails into folders for future reference rather than simply printing them out. And, of course, ensuring nobody feels they can take the odd ream home for their own use!

In the medium and long-term you should implement a thorough review of your paper purchasing policy. Are you with the right supplier? Could you use a cheaper brand? Could you buy in larger quantities? And so on. Of course, if you work with an Auditel cost and purchase management consultant to look after your stationery and business consumables overheads they will already carry out regular reviews and make recommendations to optimise your purchasing as an integral part of their ongoing management service. If not, and you’d like to contact your nearest Auditel consultant for more information about this issue, visit our website.