• Why do I need a cost reduction audit?

    We will start by saying there is a 10% chance you do not. We find savings at 90% of the clients we work with. So, there is a 90% chance that we will either find you meaningful savings, or you will receive a free review by experts.

    If you are in the 10% where we do not find savings, we simply say thank you for the opportunity and you can rest well knowing that experts, who solely make their living doing this, could not find anything.

    Conversely, we will deliver found money to your bottom line. We believe both of those are great outcomes for our clients.

    Especially considering the return on investment is infinite (no upfront costs) and the ROI on time is incredible as well (approximately 3 hours of total client time needed per engagement).

  • Yes, but I already have a team of people who handle this.

    If you or your team does all four of the following, we would agree that it may not be worth the minimal time investment to allow us to review. But even then, we always ask, “Why not?”‘.

    We are confident enough in our abilities that we would be happy to invest dozens to hundreds of hours to double-check.

    • Is the person managing the XYZ expense category solely responsible for managing that expense, or do they have other duties as well?
    • Are they incentivized to save every dollar based on a performance basis in that specific expense category?
    • Do they have over 10 years (minimum) of sole focus on this particular expense category, doing nothing else each day?
    • Do they have access to thousands of other comparable data points across industries, organizations, and peers outlining comparable costs (at a line-item level) of this specific expense category?
  • My team doesn't have time for another project. How long does this take?

    We hear this one often. In fact, it’s one of our top 5 biggest misconceptions. The fact of the matter is that this will take about 3 total man-hours of your team’s time. We estimate the following:

    • Step 1. 15-30 minutes – Pre-sales call with executives (typically CEO, CFO, President, or Owner)
    • Step 2 (provided the client engages with P3) 60-120 minutes – The client provides P3 with either copies of necessary invoices/contracts or access to online logins. P3 then pulls the data for the client.
    • Step 3. 15-30 minutes – Findings review calls. P3 reviews findings line by line with the client. Upon client approval of the findings, P3 proceeds with the implementation. Implementation is done 100% by P3’s team of analysts.
  • How much does a cost reduction audit cost?

    We only bill a client if we save them money. If we are unsuccessful in saving money, there is no fee. If we do find savings, we simply share them 50/50 for a finite period of time (from 12-60 months, depending on the level of service our clients desire).

    So, our clients receive 50% of our work product right from the start, with no upfront investment. And then, after a finite period of time, they benefit from 100% of our work for the lifetime of their business. We think that’s a pretty good deal.

    The worst-case scenario is that we do not find any savings and you’ve had an expert review by analysts whose sole responsibility is to identify savings. While we certainly prefer to find savings and make money with our clients, we don’t feel that is a terrible outcome either.

  • Are there any upfront costs associated with the cost reduction audit?

    There are no upfront costs whatsoever. You will only pay us if we find savings for you, if you agree to them, and if they positively impact your bottom line.

    We understand that this may lead some potential clients to believe that our service is “too good to be true.” But the fact of the matter is, we find savings 90% of the time. When bring forward good savings opportunities and improve our clients’ bottom line, we make money with them. Our motives are 100% aligned with our clients.

  • How do you determine the potential cost-saving opportunities during the audit?

    Potential cost-saving opportunities are identified by comparing your historical costs with what we achieve for you.

    While the data, expertise, and P3 man-hours needed to bring these savings forward is immense, the math needed to understand the savings is not.

    Pricing improvements, fee reductions, tax removals, error corrections, refunds, etc., are all straightforward to calculate and are black and white. We invite you to explore our services pages, whitepapers, and case studies to see the myriad of examples of errors and overcharges that can occur, which we fix for our clients.

    For the skeptics, there are a couple of important things to keep in mind:

    1. Our clients must ultimately approve our recommendations. Our recommendations are approved well over 95% of the time. We are not going to invest all our time and energy in conducting an audit only to come back with recommendations that do not make sense for our clients. That would be a waste of everyone’s time, and certainly our time, since we do not bill any upfront costs. Our recommendations require almost zero work from our clients, are financial in nature, and are almost always approved as a result.

    2. We spend countless hours auditing your invoices to identify cost-saving opportunities. We certainly would not do that and then turn around and expect our clients to pay our invoice if they do not understand it. Our invoices include a detailed analysis that clearly indicates where the savings are, down to the line item level. Furthermore, you can see on the invoices themselves where the cost savings are evident.

  • How soon can I expect to see results from the cost reduction recommendations?

    The quick answer is 8 to 16 weeks on average.

    This depends on a myriad of factors, such as the category being audited, location, contract situation (if applicable), vendors, etc.

    Below is a more detailed explanation.

    To begin with, our initial findings are typically delivered within 2-4 weeks.  At that point, we will review with you exactly what we are seeing, identify any potential savings, and address any questions you may have.

    During this phase, which can be considered Phase 1, we compare your data to our proprietary database of vendor benchmarks.

    We also conduct our billing audit analysis, contract compliance audit, identify errors and overcharges, and perform our market pricing analysis.  This is all done completely behind the scenes by our analysts.  After this phase, we will conduct our preliminary findings call.

    These calls typically take about 15-20 minutes per category, assuming that savings are identified.  Once the savings recommendations are approved by our client, we will proceed with the implementation phase.

    If the initial phase of our process could be seen as the ‘auditing’ stage, the second phase is simply a lot of ‘work’.   After recommendations are approved, our teams move forward and work with the vendors to implement the savings.   This could involve implementing a new and improved contract based on our benchmark data, recovering a large overcharge that the vendor has been charging for years, implementing a new tariff, or any of the other hundreds of things we help our clients with.

    The time it takes during this phase largely depends on what we identify and its complexity.  It takes an incredible amount of work, follow-up, and working through vendor objections.

    While the vendors are still happily and profitably servicing our clients’ accounts, they naturally do not want to give up margins or refund six-figure overcharges (as an example). This requires significant effort and navigating through the appropriate vendor channels to ensure that these savings get to our clients’ bottom line.

    As a general rule of thumb, we would expect to see savings reflected in our clients’ invoices within 8 to 16 weeks after this phase.  It is important to note that this timeframe is an average.  Some categories may experience quicker results than others, so there is a lot of nuance in those averages.

  • What makes you all the experts on this?

    Nothing but a lot of focused time, energy, and data. Our analysts have worked for your vendors in many cases (and in some cases even managed them).

    We know all the ins and outs of the industry and have tens of thousands of data points to compare. So, we know exactly what the vendors do, the errors that can occur, and how to achieve the best possible outcomes for our clients.

    It is no different from the expertise you have. You are experts in your business. We wouldn’t pretend to know how to run a manufacturing facility, school, hospital, restaurant, or any other type of business you are in.

    But when it comes to understanding your vendors and every intricate detail of these expense categories, we are certainly experts at that.

  • Are you switching my vendors?

    Generally speaking, we prefer to keep our clients with the same vendors for the sake of operational simplicity. Making a change can be a headache. But it’s something we are certainly willing to do, and we do it as needed, to ensure that our clients receive the highest level of service at the most competitive price.

    So, the short answer is ‘no’. The longer answer is “we can, if you would like us to.” The longest answer is that there is a lot of nuance in cost reduction consulting. In some categories, it’s easier to terminate vendor agreements than in others, citing reasons such as overbilling, unresolved operational issues, etc.

    Furthermore, geographic location can play a huge part in the market. Almost all of the cost reduction categories we work in have local market nuances due to regulations, varying levels of competition, and a variety of other factors.

    To put a very rough number on it, that has an incredible amount of nuance (i.e., it depends on which categories we would be auditing and a variety of other factors), approximately 80% of the time we would stay with your existing vendors. But we won’t know for sure until we understand your unique needs and situation.

  • How do you ensure that cost reduction measures do not compromise the quality of products or services?

    Your vendors will still be making a profit. They have to be; otherwise, they would turn off your phone lines, utilities, or any other service they are providing.

    Our goal is just to ensure that you receive the service you need at the best possible cost. The only way to effectively do this is to have these expenses audited.

    Unfortunately (or fortunately for our business), the fact of the matter is vendors make mistakes. They make mistakes, and they are going to try to maximize profit at every opportunity.

    It’s our job to use our expertise and data to keep that “in check”.

    But the vendors will continue to service your account happily (and if there are any operational concerns you’d been experiencing, we can certainly help address those as well).  Our goal is to ensure that our clients are not the vendor’s highest margin customers and that they are billed accurately or are refunded for any errors.

    The vendors have plenty of customers out there happily overpaying, just not the ones that work with us.

  • How do you handle sensitive financial information during the audit process?

    We utilize the Microsoft ecosystem for our data storage and sharing. This was created by one of the biggest organizations in the world and trusted by millions of others.

    Furthermore, the documents shared are typically not highly sensitive in nature. We do not handle bank account information or sensitive patient data (assuming a healthcare client). We are simply reviewing invoices and contracts for overhead expenses.

    That being said, we treat all our client data with the utmost care.

Send this to a friend