Steven Stark, Business Optimization Specialist, Schooley Mitchell
Smart business owners and financial executives wouldn’t dream of preparing their company’s tax returns in-house. That’s because they understand with hundreds of tax forms and thousands of rules, regulations and laws at play, the complexities of the ever-changing tax system and the potential landmines that come along with it are best left to professionals who do it full-time.
This is just one example of outsourcing that a business might do. Other key business functions like sales, IT management, customer service and shipping and logistics are routinely outsourced by companies large and small. The reasons for outsourcing are many and can range from the need for specialization in a particular area (as in our tax preparation example) to lack of staff and resources. It boils down to efficiency – if something can be done better, cheaper or faster by an outside party, then it’s a good idea to weigh the pros and cons of outsourcing.
That Can Be Outsourced?
One key area to consider for outsourcing is the monitoring and optimization of your business expenses. Money spent on key services can really add up, yet many companies aren’t even aware that outsourcing their management is an option. Some of these services include:
- Telecom (landline, wireless, internet, cable)
- Merchant services (credit card processing fees)
- Small package shipping & courier services (< 150 lbs.)
- Waste disposal (from regular trash to hazardous waste)
- Electronic signatures (rates, plans and features)
- Electronic Logging Devices (ELDs) (government compliance, billing errors, proper provisioning)
At first glance, the monitoring of these services might not seem like something that needs to be outsourced, but the truth is that these services are highly complex and require specialized resources, knowledge and significant time to manage properly. In fact, the vast majority of businesses are overpaying for these services without even realizing it.
Guilty of Weigh-It-And-Pay-It?
One of the main reasons this takes place is that most business owners and financial executives subscribe to the “weigh-it-and-pay-it” method. In other words, if a bill looks about the same as it did last month, they pay it without questioning and move on to more pressing concerns.
Whether looking at a simple waste disposal bill for bi-weekly dumpster pickups or hundreds of pages of confusing merchant services terminology, business owners tend to look for a “good deal” once and then just pay the price moving forward. This common approach, however, could be costing the business thousands (or even hundreds of thousands) of dollars in unnecessary spending per year.
This issue can be compounded for small businesses, because the onus for monitoring vendors and services usually falls upon the owners themselves. Most business owners simply don’t have the time or specific knowledge required to compare their options and truly optimize their services.
Larger businesses run into similar issues as well. Unless the company has specialized software, benchmarking data to leverage and a team of expert analysts working full-time at monitoring their services and vendors, the results will be equally disappointing as in the case of the small business owner.
Whether we’re talking about a mom-and-pop shop or a multi-billion-dollar corporation, properly managing and monitoring business expenses can be critical to maintaining the bottom line. Think you can’t afford to have your company’s expenses professionally monitored? Guess again! My company provides our clients with professional monitoring of their key business expenses for three years for free. We only get paid by sharing in any savings we find for our clients during this three-year monitoring period. In other words, the worst-case scenario for a client is that they receive free professional monitoring and quarterly audits of their business expenses and the peace of mind that comes with knowing their bills are optimized.
Average Savings of 28%
Many business owners and companies are skeptical about outsourcing the monitoring of their key business expenses because they doubt that it will really benefit them. However, having put together deals for over 23,000 clients and saved them an average of 28% on their telecom, merchant services, small package shipping, electronic signatures and electronic logging devices, the benefits have proven to be huge in terms of both time and money.
In the wake of the coronavirus pandemic, when it might be more difficult or even impossible for a company to grow revenue, cutting expenses can be simple and has an immediate impact on a company’s bottom line. And when you add in no up-front costs, free vendor monitoring for three years, and a small time requirement on the company’s part (typically 1 – 3 hours), the decision to outsource the monitoring and optimization of a company’s various business expenses truly is a no-brainer.
Schooley Mitchell is the largest cost reduction consulting firm in North America and focuses on saving its clients money through the optimization of key business services and by negotiating better rates with vendors. With the recent opening of our first office in East Tennessee, we’re excited to already be savings millions of dollars for clients in the Chattanooga area.