Avoiding the Acquisition and Divestiture Pitfalls – when it comes to transitioning the telecom and utility invoices and services

Often a Divestiture of a company can be as exciting as an Acquisition since it may mean a reduced workload to an already stretched staff. The invoices and services are being moved to another company, so how can this be a time draw from the company that is selling off the locations or company?

There are many issues that can arise from what you may consider relatively simple tasks related to a company Divestiture. However all of the work that has to be done on a specific timeline can be just as time consuming as those tasks involved in an Acquisition. Creating a transition team or hiring a company to manage the tasks can often pay for itself, just in the time saved and dollars saved due to mistakes that can occur during the transition.

In this second part of our three part series, the steps that must be taken will be outlined, as well as, some of the pitfalls that can occur when working on transitioning the telecom and utility invoices during a Divestiture.

  1. Identify the accounts that will move away from your organization by type of service, telephone, long distance, wireless, electric, gas, trash, etc… Are any of these services on your company’s consolidated invoices under contract?
  2. Determine what date that all invoices should be moved out of your company’s responsibility for processing and payment. – Most often your company will support the payment of the invoices for a specific period of time. Sometimes the support time period can be increased with an additional fee paid by the purchasing company. Know your dates.
  3. Begin gathering the invoice copies to provide to the purchasing company. – Very important, many telecom invoices will have a PIN or code on the invoice that allows them to begin discussing the account with the vendor. Having this information saves time.
  4. Give the company the tax ID –this will speed the process along.
  5. Determine if they will transition the services or cancel and set up new services – this will be discussed at length in the Transfer of Liability part of this series.
  6. Deactivate the accounts in your accounting system.
  7. Identify any current contracts on the services. Once you transition these accounts off will it trigger any shortfall charges or Early Termination fees?
  8. Identify any accounts that are in a consolidated bill.

 

Since the services and invoices are leaving the responsibility of the company, what work should be done to make a smooth transition?  First and foremost identify those services that are in a consolidated invoice. It is up to your team to contact the vendor and ask them to move the accounts off of your contract and your master account. If your team decides to let the purchasing team handle this and they do not make this request in a timely manner, the accounts will still be on your master account after the transition.

Your team can always decide to short pay the invoice however, this can cause late fees on the account and disconnect notices. Short paying the account is not in your company’s best interest due to the possibility of the disconnection of the telephone or utility services. It is best to work with the purchasing company’s transition team to place the orders to move the services off of your master account.

Another pitfall that your team may encounter is identify services that are still on your corporate account that belong to the purchasing company.  Many times this can be found months or years after the company has been divested.  The long distance services billing on a corporate account is one of the most overlooked services to be moved during a divestiture. This is due to the fact of the way that the services are set up by sub account on a master account. The only way to truly identify all services on a master account is to ask for an inventory of each sub account. This will allow your team to identify any phone lines or toll free numbers that should be on the divestiture list.

This is where the due diligence of a clean service inventory is necessary to ensure all divested services and account numbers are provided to the purchasing company. Identifying every phone line, circuit number, sub account, meter number and trash account is paramount in a smooth transition.

RadiusPoint handles Acquisitions and Divestitures for our clients around the globe and enlists our in-house team to make these transitions a smoother process for both sides. Our team can be involved at the very outset of the project to ensure that timelines are met and the services and invoices are transitioned. All of this work is done to eliminate the need of the current Accounts Payable staff to take on the extra work and to eliminate overcharges due to the invoices not being transitioned properly. Let RadiusPoint help your company Avoid the Pitfalls of your Divestiture.