Seemingly practical when contractors split the invoice into individual invoices suitable for different cost centres. At the same time, the probability increases that one and the same service will be found several times on the receipts. Vendor managers, service provider controllers or service partner managers, as outsourcing coordinators are commonly called, know this.

In its consultancy practice, eisq identifies particularly susceptible topics for unjustified multiple billing of services. Here are two examples:

• Licences - three times is twice too much: Voice recording, SAP, video conferencing: More and more software manufacturers charge monthly or annual licence fees. Service providers are happy to pass these on to their clients. So far, so good. But if outsourcing service providers who work with a team for the client with three different cost centres split up, they have to be careful. Three cost centres do not mean that user licences are charged three times. That would be twice too much.
• Project management - the industrious Mr M.: eisq consultants experience cases like this more often. A client used a logistics service provider for five business areas. Mr M. works as a project manager for the service provider. Each business unit receives a clear breakdown of all shipments per month in its invoice. In addition, Mr M. spends hours on project management. When eisq added up Mr. M.'s performance records, we rubbed our eyes in amazement: according to the records, Mr. M. worked 112 hours per week only for the client. According to the invoices, Mr M. took part in several meetings at the same time. Diligent! Or do you also see inconsistencies?

So that you or your company only pays for things once:

1. Regularly reconcile invoices with other commissioning business units. Take sufficient time for this.
2. In particular, check whether your service provider allocates the services correctly and in accordance with the contract.
3. It helps a lot if you bundle all information and invoices about the service provider in one place in the strategic service provider management.

⇒ Check the invoices! This keeps you closer to your service provider. It protects you from paying for the same services more than once.

Alternatively, you benefit from the expertise of eisq's specialised consultants at a fixed price.

Did you know?

From 25,000 euros invoice volume, a purely success-based option is also open to you!

The annual plan is in place. The steps are available as clearly distributed task packages. The client and contractor have also agreed on uniform invoices, if applicable. A fixed amount every month. Vendor managers, service provider managers or service partner managers, as common titles of outsourcing coordinators are called, pay particular attention at this point.

During invoice audits, eisq finds stumbling blocks of the following kind:

• Target and actual differ by miles: A contractor agrees to process an average of 1,000 transactions per month. Initially a little less, ramp-up phase, later a little more (routine operation). In the first six months, the contractor once reaches 870 items per month. Otherwise, the figures fluctuate around 800. In the summer month of July - holiday season - he even achieves only 640 pieces. How realistic is it for the service provider to achieve the delta of 1,400 units in addition to the monthly 1,000 units (target) in the remaining five months? Quite unrealistic.
• Budgets are missing: The projected volume does not apply. Outsourcing needs are increasing. The budget reserved for this will not be sufficient. How likely is it that a service provider will perform more on a permanent basis and receive the same amount/rather less in return? Probably not much.
• The job no longer fits the originally agreed assignment: this also happens. An e-commerce company hired a marketing agency to take care of its social media pages. For a fixed amount per month, the agency was to take care of four presences. One year later, only two social media accounts exist. In exchange, the marketing agency suddenly sends out thousands of product samples month after month. Do you also suspect that the money might no longer be used in a way that creates value?

Here are two practical approaches to help you circumnavigate comparable situations with confidence:

1. Plan and manage your outsourcing tactically. This means: Update continuously. eisq recommends comparing your medium-term outsourcing activities once per tertial.
2. Use the opportunity of a neutral expert assessment from the outside. It is well known that you can see more.

Benefit from the knowledge gained from hundreds of outsourcing projects. Certified know-how. Thanks to eisq, you achieve better results in outsourcing. You manage your service providers more effectively and with optimised costs.

The invoice arrives and mentions a number of transactions/activities. Quickly take a look at your own statistics... and - surprise - find different values. Service provider controllers or service partner managers, which are also common titles for vendor managers, hopefully do not experience this on a regular basis.

If the contractor and the client use different data sources for reports and invoicing, the values often differ.

Typical reasons for this include:

• Divergent definitions: Even for (seemingly) fixed terms there are different descriptions. For example, accessibility in the inbound call centre: Company A defines it as follows:

Reachability = number of calls answered per time period divided by the total number of calls per time period.

Whereas Company B interprets the same metric as:

Reachability = number of calls answered per time period divided by the total number of calls minus short disconnects (< 5 seconds in length) per time period.

If there is such a deviation in understanding, the values will consequently no longer match.

• Systemic errors: Let's look again at accessibility. The client may arrive at different values if he uses the reachability based on the data of the connection network operator. If the service provider uses the data from its telecommunication system, all calls that do not arrive at the service provider's premises will be omitted. This is particularly annoying if the service provider provides about 30 channels for the client, but sometimes receives 32 calls at the same time. The contractor's telecommunication system never knows about the two more, because they never arrive there. As a result, the service provider has other reachability values.

There is no limit to your imagination for other reasons why values differ between data sources.

Four practical recommendations help Vendor Managers to draw correct values:

1. Determine the data source in advance.
2. Fix the definitions for the values in writing.
3. If possible, use your own systems. This minimises the risk that the data source or definition of a key figure changes without your knowledge.
4. Regularly check whether the definition and data source of the key figures in the calculation are still correct.

Alternatively, you can outsource the task of invoice verification to the specialists at eisq.

For months, everything seems to be in perfect order. The invoices correspond to the commissioned scope and thus to the planned budget. Suddenly, an additional demandbrings beads of sweat to the foreheads of vendor managers, service provider controllers or outsourcing coordinators. In retrospect, everything seems more expensive, the internal pressure on the service provider controller increases.

Sometimes service providers deliberately create such a situation. More often, however, banal reasons cause additional demands. These can be costs that your supplier initially allocates incorrectly internally and then smooths out. Or an internal check at your outsourcing partner reveals that an item has been forgotten for months. As we all know, mistakes are human.

How do service partner managers guard against this? Some first try to reject the claim. If the services are justified, this hardly promises any chance of success. Another strategy is to ask the contractor to waive the money. Why would a company that pays salaries at the end of the month and wants to make a profit do that? Negotiations for a voluntary debt waiver usually come to nothing. It is worse when the vendor manager becomes dependent on his service provider in the course of negotiations. This is by no means a desirable situation.

To save you from this, eisq advises:

• Check explicitly whether your service provider really charges for all services according to the contract. Bear in mind that the statutory limitation period is three years, starting at the end of the year in which the invoice was due. In other words, up to four years is practically possible.
• Regularly reconcile the services with your outsourcing budget. A separate Excel list works wonders.
• Actively raise missing items with your outsourcing service provider. At the same time, inform your colleagues in finance so that appropriate provisions are made for your cost centre.
• Take countermeasures at an early stage.

An external audit of your invoice with a neutral eye also reveals unconsidered items. This gives you the chance to actively shape the process of subsequent claims instead of being driven.

As the saying goes, "You can't make an omelette without breaking eggs". Mistakes happen. Vendor managers who check invoices for accuracy should take a very close look. Because, as eisq observes, penalties, correction items, deductions and similar items are too often not found on the invoices, or are incomplete.

As an outsourcing manager or service provider taxpayer, those who initially point out errors have several options for action.

1. You request a correction of the invoice.
2. You only reimburse a partial amount.
3. You let it pass and turn a blind eye.
4. You agree with the service provider that appropriate deductions will be made in a subsequent invoice.

Often, the fourth variant proves to be more cooperative at first glance. Four measures will help you to ensure that this also works as a partnership.

Read this practical case.

Our client received an invoice for 160 hours of training. The outsourcing coordinator noted that 85 of these training hours had not yet taken place. The training planned for the last day of the month and the associated costs were brought forward to the following month by mutual agreement. The outsourcing coordinator and his project contact on the other side reached a pragmatic agreement. The invoice had already been written. It remained. The training would simply take place the following month. You guessed it: for operational reasons, the qualification measures no longer took place. The project contact person enjoyed his holiday. The service provider did not deduct the 85 training hours from the subsequent invoice. When asked about this, the supervisor of the project contact person of the service provider said that the training hours in the first month were correct. He did not have any other data.

Our client benefited from his knowledge from the cooperation with eisq:

1. Because the outsourcing coordinator always writes and sends short written notes on all agreements, he had an advantage. He pulled out his email confirmation to postpone the costs and training to the following month.
2. By maintaining a continuous Excel file with payments, deductions, budget shifts and so on, the outsourcing coordinator had the necessary transparency.
3. Because he remained calm and objective, he took the emotional edge out of the supervisor's sails.
4. The service provider turned the tables successfully. By emphasising the partnership, he replaced the feeling of "the client is taking something away from us" with "he is treating us fairly".

Keeping track of deductions correctly is a fine art in auditing. Make your work easier.

If necessary, you can call in the professionals from eisq.