Finding new business. In my 20+ years with the Association, that has always seemed to be the driving force behind our member companies. That could be in the form of leads from exhibiting at Process Expo, market opportunities derived from our market research, or advertising in a number of FPSA sponsored media. However, in late 2022, we introduced a new member benefit which has just as much potential to impact the member’s bottom line, not by creating new sales opportunities but by addressing expenses and helping members to not only recognize where they are over-spending but aiding them to recover funds that have been overcharged in a variety of areas.
I spoke recently with Matt Thiele of P3 Cost Analysts to help me get a better feel for this program and how members can take advantage of it.
FPSA: Can you tell me how P3 works with its clients?
Thiele: Well, we are a no cost extension of their cost containment initiatives. We have a team of industry insiders who perform a forensic audit on operational vendor invoicing in search of errors, overcharges, and refunds. Once uncovered, we work directly with the vendors to make corrections and deliver the savings back to the bottom line.
Think utilities, shipping, waste, credit card processing, laundered services (uniforms/mats), etc.
Simply put, we uncover savings that would not be possible without insider knowledge and our robust, comprehensive market pricing database.
FPSA: What areas do you typically see a higher degree of overcharges?
Thiele: Good question, but it really depends on the market, the expense category, and the type of business.
For example, we find savings 90% of the time on credit card processing invoices for B2B transactions. However, it is very rare to find savings for in-person B2C transactions. It often comes down to risk algorithms and interchange SIC codes.
Waste is another good example. In some markets, the waste vendors provide very competitive pricing with simplified invoicing. In other markets, the vendor invoices are rife with inaccuracies, made up fees, and “margin grab” pricing.
FPSA: When you identify overcharges, what is the typical reaction of these vendors or third parties and how long does it take to get money back from them?
Thiele: We understand that the customer-vendor relationship is paramount and so we are very delicate in our interactions with the vendors in an effort not to disrupt those partnerships. However, when there are errors, or pricing is way out of whack, the vendors will almost always meet us at the table to resolve the issues. Our goal is to keep our clients with the incumbent vendor. Only about 20% of the time would we suggest our clients consider another vendor because the current vendor is unreasonable.
At the end of the day, our clients need the vendors, and the vendors need our clients, so amiable resolutions are the norm.
It can take weeks to several months to work through all the channels to get those savings delivered.
FPSA: How much work is needed on the client’s side to work with P3?
Thiele: Great question! Often this is a client concern. The good news is that we do all the heavy lifting.
Some clients will give us access to their vendor customer portal which is about all we need to review the invoicing and historical data. This might take the client 5 minutes. Others will prefer to send us contracts and 2-3 months of invoices. On average, it takes 1-2 hours of our client’s time for us to get up and running with the forensic audit. The ROI on that time is quite often tens of thousands in savings.
FPSA: If P3 is paid for this service out of the savings realized, what happens if you don’t find any? How much might we be expected to pay P3?
Thiele: We work on a contingency model. If we don’t deliver savings, there is no cost, ever.
FPSA: So, how long do you share in the savings you find for your clients.”
Thiele: We have a 36-month or 60-month term which is based on the service level desired.
FPSA: How long has P3 been providing these services and to how many clients?
Thiele: The company was started in 1991, and we have worked at over 30,000 client locations, finding savings for 90% of our engagements.
FPSA: Matt, thank you very much for this information.
FPSA members interested in learning more about saving money in utilities, waste and recycling, merchant processing, property taxes and other areas should reach out to Matt today via email or phone (414.688.0916).
In the meantime, P3 is just one of the cost savings programs that FPSA provides to its members. Members are invited to review these programs to see where else they might be able to save money and continue strengthening their bottom line.
Andy Drennan, FPSA SVP
