Today, most companies rely heavily on outsourcing. Whether that means hiring outside companies to manufacture their goods or having outside service providers handle operational tasks, there are a lot of ways that modern-day companies are using outsourcing to lower their workloads or cut their expenses. Unfortunately, outsource invoicing can be quite complex, which means that many businesses are paying more than necessary for the services or goods that they receive.
Unnecessary fees or expenses are often tacked onto invoices from outsourcing providers. Without going through the invoices line-by-line, companies often blindly pay these expenses, even if they weren’t included in the original contract.
Closely reviewing the invoices that you receive from outsourcing providers could help you identify a number of unnecessary fees that you are currently paying. Once you identify areas where you are being overcharged by a particular company, you can then approach them to have those fees removed or to renegotiate your contract. Below are three ways to find hidden savings in your outsourcing invoices:
1. Make Sure the Company Is Providing the Work Themselves
Imagine this scenario: you are paying an outsourcing company full price for their services. Instead of providing those services directly to your business, however, they secretly turn around and send the work overseas, where they have it completed for a fraction of the cost. They then keep the extra money that you paid for themselves.
Today, situations like these occur all of the time – especially involving tasks where workers don’t need to directly interact with customers or clients. For instance, IT services are often farmed out to low-cost overseas providers while the original outsourcing company keeps any extra money for themselves.
Ask each outsourcing company to provide you with a list of everyone working on your account, including their location. Make sure the rates you are being charged correspond with the typical rates for the countries where the workers are located.
2. Look for Unnecessary Software Expenses
Today, many software programs are purchased via subscription rather than bought outright. This model, which is known as software as a service (SaaS), helps ensure that your software programs are always up to date. Unfortunately, it also can wind up costing you extra money – especially if you are paying for software programs that you don’t need.
When reviewing outsourcing invoices, find out exactly what software programs you are paying for. Make sure each program is necessary. If not, canceling subscriptions to those software programs could wind up saving you a significant amount of money.
3. Make Sure You Aren’t Being Overcharged for Maintenance
Check the invoices that you receive to find out whether the outsourcing company is handling maintenance on their own or whether they are getting competing bids from outside companies. If they are taking on the work themselves, they may be charging you more than necessary for maintenance-related tasks – especially if the same services could be provided by another company at a lower price.
Searching for hidden savings in your outsourcing invoices can wind up dramatically lowering your expenses. It is easy to fall into the trap of just taking your invoices at face value and paying them month after month. Over time, however, hidden expenses can get added into those invoices, making them a lot higher than necessary.
Taking the time to go through the invoices line-by-line seems like a tedious task. When you consider how much money you can save, however, it is well worth it. You may be surprised by just how much you are overpaying – especially if you work with a lot of outside providers. This is one situation where a small investment of your time can have a positive impact on your bottom line.