This type of survey would actually never work in the IT vendor world (versus vendors or versus customers) for two reasons: 1. Almost all customer contracts contain confidentiality provisions which would restrict disclosure; and 2. Almost all vendors would simply shut off access to the service or support (or the license remotely) if the customer didn’t pay.
But I would be interested, nonetheless, to know who the really bad customers are out there.
Before going on vacation this year, I called my cellphone provider to talk about roaming charges. I was going somewhere I’d never been (still in the US) and my specific provider has a nationwide plan that excludes those types of fees. But it is a little off the beaten path, so I wanted to just make sure.
While on vacation, I made 4 calls. Each lasted less than 2 minutes. One guess as to what my wife found on our cell phone bill yesterday?
It wasn’t much… about $8. But it’s not the amount, it’s the principle. Yeah, I know… people who argue principles are going to lose when confronted by people who argue facts. And the fact is that the cell contract clearly discusses the fact that while I have a “nationwide” plan, the definition of nationwide is left to a pretty fuzzy, and constantly evolving coverage map on their website (see my immediately prior post on Unintended Consequences).
But even if I lose the argument I’m going to have with them this week, the act of reviewing the invoice is the important lesson to learn.
The simple truth is that even through a mountain of hardware and software, at the end of the day, all of our processes (automated or not) are governed by fallible people. Since we make mistakes even on routine things, it stands to reason that mistakes are going to appear more frequently in highly-customized situations, such as a unique contract between two businesses.
So, on the off chance that you’re not already reviewing every invoice that comes in against its parent agreement, today is your chance to start.
But “WAIT!”, you say. Your organization has a process for handling invoices. One that doesn’t include you. Well, guess what… time to create a new “value added” situation! Ask to change the process. Here’s what you’ll need for most places to make this effective and without too much interference in any existing process:
1. A contract/purchasing numbering system. You’ll want to find a way to have the vendor tag EVERY invoice they send you with a contract/purchasing number that links the invoice to the genesis of the invoice. Include a contractual requirement that this number be listed on all invoices and that you can refuse any invoice without this number.
2. Change the default payment address in your contracts to be YOU. Oh, come on… you KNOW you like mail. How many “real” letters do you still get? 😉 This is your chance to get more. If you use this suggestion, you’ll only be getting invoices related to the contracts you worked on… so at least you won’t get invoices for the toilet paper purchase you had nothing to do with.
If you can’t change the payment address, then teach the recipients of the invoices to look for the contract number that you’ve assigned. In most organizations where I’ve worked, the contract number is EASILY identified and is drastically different than PO numbers. So I created a little business-card sized notecard cheat-sheet. I handed it to the people receiving invoices and said that if they get one with a contract number on it, they need to send it to me after approval. (This only works if you also teach your business owners to refuse and send-back invoices that don’t have contract/purchasing numbers on them.)
3. When you get the invoice, compare it against the contract, line-by-line if possible. If not possible, look for groupings of cost (software, hardware, services, maintenance, training, etc) and compare those. If still not possible, send the invoice back to the vendor as being incorrect (since your template already includes language that requires this level of itemization, right?).
4. If the invoice is not correct, send it back to the vendor with a pre-printed form (create one in Word – or ask your A/P people for one, I know they’ve got one). And when I say pre-printed, I mean, don’t fill it out in Word… make it generic with checkboxes that you actually mark in pen. Don’t even write the vendor’s name on the form (or have a place for it). Make it look as automatic as possible with as little human touch as possible. So the form would simply say: “Dear Vendor: We are returning this invoice to you to correct the following defects:” and then have checkboxes for “excessive/incorrect amounts, missing contract number, etc”. It would close with “Please correct these errors and resubmit the invoice for payment. Note that per our agreement, payment is not due until ___ days after receipt of a correct invoice.” Fill in the number of days in your agreement (you did include this language in your template contract, right?).
5. If the invoice is correct, send it to A/P for payment.
Ta-da! Instant value-add. Even on a really busy day, you’ll probably only get a few of these. And if you still don’t have the time to do all of this, create/document this process, create the form return document I just wrote about… and teach your business owners to do this themselves. You’ll still be adding the value – just distributing the actual work.
Oh yeah… one more thing, lest I forget. Regardless of whether you or your business owner is doing the comparison and the returning of invoices, make sure you’re recording the difference between the amount invoiced and the amount the contract was for. In other words, document your cost savings to the company!