What Is a Waste Audit? And How It Can Save You Money

Scott Swearingen / Waste Management / October 20, 2021

An area for potential saving that is often overlooked by businesses is their waste management practices and spending. By no fault of their own, businesses are taken advantage of by waste vendors in the form of unnecessary fees, overcharges, billing errors, and aggressive pricing. This ultimately leads to businesses paying much more than is necessary for their unique waste management needs.

Businesses also spend more than they have to on waste management through poor waste and recycling handling, storing, and disposal practices. Without the right equipment, knowledge, and processes in place, additional waste costs can add up quickly.

Fortunately, businesses can uncover savings in their vendor invoices and contracts while also optimizing their waste disposal practices through a detailed waste management audit.

In this article, we’ll take a look at what a waste and recycling audit is, why businesses need an audit, the key benefits of a waste audit, and how these audits are conducted.

What Is a Waste Audit?

Typically conducted by a team of waste management industry experts, a waste management and recycling audit serves as a way to find any errors, overcharges, discrepancies, or other opportunities for savings within your waste invoices and contracts.

A waste audit includes a needs-based assessment of your business’s waste management requirements in order to optimize the services you receive. During a waste audit, a team of experts will also work through every line item on your invoices and contracts to evaluate the cost-effectiveness of all charges and services.

A waste audit will also uncover inefficient waste practices while improving sustainability. This can happen through the implementation of better recycling programs, right-sizing of equipment and volume usage, and gaining an overall better sense of your business’s waste stream.

Why Businesses Need a Waste Audit

Billing in the waste management industry is notoriously complex and vendors often write their contracts to benefit themselves instead of their customers. This leads to a number of overcharges and fees that can add up quickly if left unchecked. Unfortunately, the average customer won’t be able to understand which fees are valid or invalid, how to file a complaint about these fees, and whether they can negotiate better terms with their vendor.

Though some fee increases are valid and should be expected at some point, even these can be misapplied, increasing the overall cost burden to a customer. This, paired with the variety of invalid fees and charges that customers face due to pure profit motive on behalf of their vendors, is a recipe for overspending.

On top of needing a waste audit to uncover these overcharges within invoices and contracts, businesses need a better understanding of their waste handling and disposal practices. A number of factors play into a business’s overall waste management spending, including how much they recycle; the types of waste they have; what types of equipment and receptacles they have onsite; how often their waste is picked up; and where that waste gets diverted to.

Without a proper audit, businesses likely have sub-par methods for managing these things.

Key Benefits of a Waste Audit

1. Reduced Spending on Waste Management

With the help of waste management auditing experts, you’ll be able to find any overcharges, errors, or invalid fees within your waste invoices. Once found, your auditing team can bring these discrepancies to your waste vendor and you’ll receive the credits back that you deserve. Your auditing team will also continue to audit your future invoices and contracts to ensure that your waste vendor is in fact billing according to their contracts.

An auditing team can also help you negotiate the best terms possible for your waste management contracts. They’ll have all the relevant benchmark data for the waste industry and know what fair pricing looks like. Instead of trying to do this yourself and take a vendor’s pricing at face value, you can feel confident that your auditing experts won’t tolerate aggressive pricing from the vendor. With their expertise, you’ll enter contracts that are ideal for your unique business.

Furthermore, if your business operates across multiple facilities, your auditors can help you consolidate contracts when appropriate to procure better pricing for all locations.

2. Optimization of Waste Management Practices

By working through every line item on your contracts and invoices, auditors can see which services actually align with your business’s needs and which ones can be removed. They’ll also be able to recommend the best kind of equipment you should have at your location in order to optimize the services you do receive. Additionally, any strategies that they recommend implementing will have improved sustainability in mind.

Moving to a more “green” future is important for many companies, and understanding your waste management practices is a good first step. Through an audit, you gain insight into what’s going into your trash, how you can recycle more, what recyclables may have value, and how all these factors relate to reduced hauling fees.

How a Waste Audit Is Conducted

Though there are DIY methods of waste auditing, it’s best to work with a team of qualified waste auditing experts to get the most accurate and actionable results. Not only does it save you a great deal of time by working with experts, but you can feel fully confident in what they find and recommend for your business.

There are simply too many industry nuances and details when it comes to waste auditing that the average customer won’t be able to understand and implement themselves.

To get a feel for how a waste audit is conducted, we’ll outline the proven process we use at P3 Cost Analysts. We have a team of experts that have worked in waste auditing for decades and understand all the intricacies of the industry.

Step 1: Intake

We typically request at least three months’ worth of invoices from our clients and a letter of authorization to proceed with the audit. We will also gather all current contracts you have with your waste management vendor(s).

Step 2: Analysis

Once we have your invoices and contracts, we will work through a detailed analysis of all line items and contractual terms to uncover any overcharges, invalid fee increases, errors, or other breaches of contract. In cases where we feel that a business can benefit from using different equipment or disposal methods, we will visit the client’s site to get a better feel for their waste management needs.

Step 3: Share Findings

After about four weeks of auditing, we usually have all the information and findings we need to bring back to our clients. We also make sure to explain these findings in a way that’s easily understood by our clients.

Step 4: Negotiate

Securing the best contract agreements for our clients typically involves a fairly lengthy negotiation process with their waste management vendor(s). We know the regional minimum amounts that waste management companies will agree to, and we do everything we can to get these prices for our clients. In cases where the client recently entered into a new contract before the audit, we can still help modify the terms of that contract to best serve the needs of the client.

Step 5: Implementation

After all negotiations are complete and we’re satisfied with the terms, we begin to implement all recommendations for our clients. Only once the client actually sees the savings we have delivered through the audit do we then share in the cost savings with the client. This is typically a 50/50 sharing of savings each month that we continue to monitor a client’s invoices.

Reduce Costs by Conducting a Waste Audit Today

Due to the complex and often shady business practices of waste management vendors, it’s wise for businesses to work through a detailed waste audit. Not only does a waste audit uncover a variety of overcharges, errors, invalid fee increases, or breaches of contract, but it also helps businesses improve their long-term sustainability. By implementing better waste disposal practices, businesses can reach their goals of going greener and save money while doing so.

As mentioned above, to see real results from a waste audit, it’s best to work with a team of waste management industry experts. If you’re interested in conducting a waste audit for your business, the team at P3 Cost Analysts is ready to help. With over 50 years of combined waste and recycling expertise, we secure the best deals for our clients and make sure that they’re never taken advantage of again.

To schedule your free expense audit, contact us today!

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