It’s no secret that an enormous percentage of wireline voice and data telecommunications costs –often in excess of 30%- are appended to the end of the invoice, mysteriously labelled as something along the lines of “Taxes, Surcharges, and Fees.” For most organizations, it’s difficult enough to reconcile all services and their contract rates across the dozens or hundreds of invoices received each month, many of which are hundreds of pages. In fact, most organizations simply don’t have the resource or expertise to truly audit their invoices each month so they very basic metrics to rubber stamp their invoices for approval. Within 10% of last month? Pay it! So what about that other 30%+ of the invoice? Is anyone checking that? No. They’re not.

Why bother to check it though, there’s nothing that can be done about those charges, right? I mean, taxes aren’t negotiable and the carriers couldn’t get away with mis-billing them, right? Surcharges and fees just come with the territory, everyone charges them so we are just stuck with paying them, right? Wrong and wrong. While it’s true the mechanics of these charges are a bit complex, they’re not indecipherable. In fact, once you take the time to unravel them once, auditing them routinely can be done with relative ease. The truth is that some taxes aren’t actually taxes as we know them, their name just sounds like a tax, e.g. “Property Tax Allotment.” Some surcharges are indeed mandated while others are simply passed through from the FCC to the carriers to the end customer. But some of them are functions of one another and some of them change from time to time and as anyone who’s ever reviewed a telecom invoice knows, when changes occur on an invoice, the carriers will generally find a way to mess it up. Most notably, we’ve seen a few instances where –for better or worse- tier 2 carriers have made significant mistakes in their surcharge policies that led to massive swings in unbilled or overbilled surcharges. So from an audit perspective, a huge amount of the invoice flies completely under the radar and significant errors and recoveries may be identified. Further, gaining and understanding of these costs now can pave the way to better decisions in the future to help control costs beyond services, below the bottom line.

Am I suggesting to negotiate surcharges and fees? No. However, being savvy about which services are state regulated vs. federally regulated and how the taxation and surcharging for those services actually works can have a significant influence on your next purchasing decision. In fact, we’ve seen many instances where everything looks good on paper and a client can save good money by switching carriers and/or technologies, until you factor in taxes, surcharges, and fees only to realize that if that deal were to be signed, the customer would end up paying more money. Of course, many organizations don’t have the time or resourcea to develop a program that allows them to audit their telecom usage and billing and make go-forward decisions with the inclusion of taxes, surcharges, and fees, so for help getting started, contact Source One Management Services, LLC at
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David Pastore

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