In the three part series Avoiding the Pitfalls of Acquisitions and Divestitures there was a lot of information covered about processes that should be followed. Sometimes it is easier said than done and the best laid plans go out the window when multiple departments become involved. While the purchasing company shares the largest part of the work when it comes to the Acquisition and Divestiture activities, both parties must do their parts of the process to make the various tasks fall into place.
Recently, RadiusPoint identified an issue with a divestiture of a client from 2015 that resulted in thousands of dollars over paid. During an Inventory of a set of locations, charges were identified that were divested to the other company that continued to be paid for two years. RadiusPoint was identifying all of the telecom services that were being billed to the location. Here are some of the things that were inventoried and identified:
· Phone lines – identified the vendor, all features and monthly costs and who answered when the line was called.
· Long distance – identified all phone numbers billed to the sub account, all monthly fees billed on the subaccount and then cross checked the lines billed on the sub account to the phone lines billed by the local vendors.
· Data circuits – identified port, PVC and circuit information. Checked usage levels
The Inventory revealed that the Client continued to pay for services that were divested in 2015. The services were billed on a sub account that had originally been used by the Client to consolidate several locations. Unfortunately, the one sub account was allocated to one location which was being charged for the long distance of three locations. Even more unfortunate was the fact that one of those locations had been divested in 2015 and the long services and monthly fees cost over $600.00 per month for over two years.
Ensuring that all services are identified is a key take away in the processes that are followed during the Acquisition or Divestiture. Don’t take the word of the company that is divesting the services to your company, do your own Inventory of all services that are being acquired. Also, after the Divestiture, make sure all of those services divested are truly removed from the invoices.
All of these steps take time and that is where RadiusPoint can assist. RadiusPointhandles 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 Acquisition.