Are You Being Overbilled by a Vendor?

Most companies receive a large number of bills each month. It isn’t uncommon to only glance at various invoices and, if the charged amounts seem in line with past billings, pay them without any additional thought.

While that approach might not be problematic for certain set expenses, it isn’t ideal in all cases. It’s possible that your company is being overbilled by a vendor, but you haven’t noticed the issue.

Overbillings, even small ones, cost your business money that it should otherwise be keeping. Over time, the damage to your bottom line can be dramatic. If you want to make sure you aren’t incorrectly charged by a vendor, here’s what you need to do.

Review Your Contracts

First and foremost, you need to review any agreements you have in place with the vendor. Usually, you’ll have a contract that outlines your rates or financial obligation, so you need to locate that document.

Once you have it, look through the agreement and find sections that dictate your rates, fees, or other payment-oriented details. This lets you know what you should be charged for various goods or services, giving you valuable information you’ll need for the next step.

It also creates an opportunity. In some cases, changes to local laws may alter the rates you should be paying. By reviewing the contracts, you can make sure they accurately reflect current legislation.

Conduct a Formal Audit

After you find the rates in your contracts, it’s time to review your past billings. Ideally, you want to pull invoices for the last 12 months for every vendor.

Begin with one provider, and work your way through the billings. Read every line item to see what was charged and why. Look for discrepancies based on what is outlined in your contract, highlighting them or making notes as you proceed.

Prepare for the Conversation

If you find issues on any invoices, you’ll need to discuss it with the vendor. However, before you initiate contact, it’s wise to take a moment to prepare.

First, keep your emotions in check. While being overbilled can be irritating, there is a chance it wasn’t intentional. Someone could have entered the wrong amount by mistake, accidentally flipped two numbers, or otherwise made an unintentional error.

Once you’re calm, consider what you’re going to present. Along with the details from the invoices, think about the questions you need to be answered. This could include whether a billed amount was a mistake or what next steps the vendor will take to correct the issue if the charge isn’t justified.

Speak with the Vendor

After you’ve determined what you’re going to say, it’s time to reach out. You may want to use multiple approaches, such as a phone call followed by an email. That way, you can address the issue quickly but also have documentation showing you took action.

Make sure you remain professional during the conversation. Your goal should be to find an acceptable resolution, not chastise a vendor for what may have been an honest error.

Take Follow Up Action

In some cases, speaking with the vendor will resolve the issue quickly. While they may need to take a moment to review their own records, if the problem was the result of a mistake, they may fix it quickly.

However, if that doesn’t occur, you may have to take additional steps. This could range from changing vendors to considering legal action, depending on your situation.

In any case, it’s also wise to make reviewing incoming invoices a priority. That way, errors can be found immediately, making them easier to address.

If you’d like to learn more, the team at Apogee Managed Solutions can help. Contact us today.

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