It's for you: hidden gold in telecom bills: telecom billing errors cost the apartment industry millions of dollars every year. Here's what can be done about it.

There is an untapped source of income within reach of most apartment owners. Every year the apartment industry wastes millions of dollars in overcharges on telecom bills. The technology consulting firm Gartner Group estimated that telecom overcharges represent as much as 20 percent of a typical bill.

There are many causes for overcharges, including resident fraud, unauthorized third-party charges, failure to disconnect unneeded services and mistakes in telecom carrier order entry. The most costly failure, however, is over-billing.

Most owners and managers do not have an effective auditing process for telecom payables. Because of incomplete information on monthly invoices, ambiguous service agreements and convoluted pricing plans, auditing telecom bills is a complex challenge. Even the most knowledgeable and dedicated staff members can lack the information and expertise to identify and correct these errors. As a result, some apartment owners hire consultants to review telecom bills.

Owners can correct these issues with some legwork. The first step is to determine whether over-billing has occurred. This involves creating a detailed inventory of each circuit and feature in the telecom portfolio and conducting a variety of inventory checks to identify overcharges.

Auditing the Inventory

The foundation of any successful telecom audit is a detailed inventory. To build an inventory, call the telecom company and ask it to send a Customer Service Record (CSR) for each account.

The information on a CSR can be used to build a list of every service element and associated charge that is paid each month. After the inventory is built, collect reference materials, such as the carrier service agreement and tariffs the provider has filed with the Public Utilities Commission. With those materials in hand, ask the following questions:

* Who at the apartment company reviews telecom invoices before they are paid?

* Are billed lines and features actually working?

* Do the charges reflect only the needed lines and features?

* Do the charges reflect only the lines and features that are the responsibility of the company being billed?

* Are charges for duplicate lines and features reflected in the bill?

* Would sharing lines for multiple uses result in lower costs?

* When employees move, are added or change leasing offices, are their phone lines, data circuits, calling cards and wireless phones disconnected promptly?

* What telecom services and contracts are inherited when a new community is purchased or managed?

* Is the telecom provider complying consistently with contracted or tariffed rates, discounts, terms, billing increments, minimums and service level agreements?

* Does the business use the optimal service combinations and calling plans based on unique usage patterns for each service?

* Would account consolidation create greater savings?

* Which installation charges, line charges, feature charges, mileage charges, usage charges, surcharges, fees and taxes are legitimately assessed and correctly calculated? Which are not?

A Success Story

An apartment company reduced its annual telecom expense by $140,000--or 41 percent--by conducting a telecom audit. The audit revealed numerous instances of unauthorized charges, including fees for Internet access service that residents were charging to the community's pool lines and alarm lines.

The company also discovered many lines and features that were not needed and found opportunities to use a single service for multiple purposes. Finally, the company consolidated services at most of its communities with its predominant telecom service provider on that carrier's best available rates.

Solving those problems requires developing a certain amount of telecommunications and auditing expertise, but the results are well worth the effort.

An apartment owner's information technology department must be involved in the auditing of telecom bills to ensure accuracy, and accounts payable must be given the details about the circuits and features that make up each monthly summary bill so they know what they are paying for. Exchanging that kind of information in a well-documented audit process is crucial for apartment owners and managers who want to stop overpaying for telecom services.

Eric Edstrom is Vice President of Dallas-based ProfitLink Telecom Consultants LLC. He can be contacted at 469/374-9689 or [e-mail].