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

Everyone at the company is so excited, your organization has just purchased another company to bring under your corporate umbrella. This means growth – the excitement is brewing because the company is doing well. But wait, how are we going to bring over this companies telecom and utility billing to merge into our accounting system? There are many questions that arise and unfortunately, often times the people handling the acquisition don’t have the answers, or don’t communicate to the Accounts Payable department. This is an oversight of epic proportions since the transition of invoices from one company to another can create confusion, disconnected services and loss of business.
In the first part of this three part series the activities that surround the Acquisition will be addressed and some important tasks will be outlined. In the second part of this series, the important tasks surrounding Divestitures will be outlined. In the third part of the series, the Transfer of Liability versus setting up new services will be discussed.
Acquiring locations or an entire business from another company will involve multiple departments in your organization. Certain types of services and invoices are relatively simple to move over to your corporate umbrella, sometimes with a well worded letter from your legal department and the purchase paperwork. When it comes to the telecom and utility invoices, the well worded letter is just not enough. The steps below will assist the Accounts Payable team in getting the ball rolling when an Acquisition has taken place.

  1. Identify the accounts that your team needs to bring over to your organization by type of service, telephone, long distance, wireless, electric, gas, trash, etc…
  2. Determine what date that all invoices should be moved over – this is very important because if the previous owner is supporting you for a short period of time, the services must be moved over during that timeframe or risk disconnect.
  3. Obtain the most current copy of the invoice – Very important, many telecom invoices will have a PIN or code on the invoice that allows you to begin discussing the account with the vendor. Having this information saves time.
  4. Obtain the tax ID – the accounts may be moving to your tax ID but having this will speed the process along.
  5. Determine if you are transitioning the services or canceling and setting up new services – this will be discussed at length in the Transfer of Liability part of this series.
  6. Set up the new vendors in your accounting system.
  7. Assign the GL codes and Cost Centers or Location numbers to the Account numbers.
  8. Call the vendor to either change the address and perform the Transfer of Liability or cancel the services once new services are set up – this will be discussed at length in the Transfer of Liability part of this series.
  9. Identify any current contracts on the services.
  10. Identify any accounts that are in a consolidated bill with the previous owners that needs to be moved onto its own account.
  11. Be ready to follow up with the vendor multiple times to make sure that they have received and processed the paperwork to affect the change and to ensure that the billing address has been changed.

Ensuring that the services have been moved over in a timely manner is a tall order for any already stretched Accounts Payable department. Ensuring that the accounts that are under contract are moved to your corporate account can take 3-6 billing cycles to move. There are many areas that will cost your company money, beyond the time of your staff. For example, if the long distance service is under contract and on a consolidated invoice with the current company and this is not moved to your corporate account, the overcharges can be staggering. The new long distance carrier must be contacted to provide all phone numbers that will be added to the account and then the local carrier must be called to change the PIC and LPIC.
This is where the persistence is necessary to ensure that the vendors place the orders in a timely manner to get the addresses changed, the accounts moved to the corporate accounts and the previous contract charges removed from the billing. All of these tasks involve multiple steps which can be overwhelming for the staff that is tasked with handling this Acquisition.
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 Acquisition.