Steps to Management Success – Step 42: Double-Check the Books

Written By Rick Frishman Published March 31st, 2010

STEP FORTY-TWO

Double-Check the Books

Every business gets bills—lots of them. All too often, these bills are not carefully scrutinized; they’re approved far too easily. As long as a bill relates back to a valid purchase order, a check will be issued. But the fact is, more systematic scrutiny can detect and even help avert overcharges, whether intentional or not.

WHAT IT MEANS: Don’t accept every bill at face value. Just because it looks official and is neatly computer-printed does not make it accurate. In particular, bills from professionals (advertising agencies, law firms, computer consultants) can be inflated, especially if you never question exactly what services and billing rate they reflect. You don’t want to haggle over every bill, but it’s a good cost-control measure to question whatever you don’t understand and to demand a clear and detailed accounting. Also, you may be able to negotiate a slight discount for prompt payment—and it costs nothing for you to ask.

ACTION PLAN: Make sure that every bill crosses your desk. Keep a file open for reviewing bills regularly, once every week or two. Be very clear what you’re paying for. Is it in line with previous charges? If not, why not? If there’s a question or concern, don’t hesitate to contact the vendor or service provider. There’s no need to be nasty or accusatory about it—and there is definite proactive value to sending the signal that you don’t just rubber-stamp every invoice that crosses your desk.

EVEN BETTER: Shop around from time to time to get competitive bids, and make sure your coworkers and employees do the same. Let your vendors and service suppliers know when you’re not happy with a price increase. Make it consistently clear that you will not hesitate to take your business elsewhere if you’re not getting truly competitive pricing.

(Excerpted from: 10 Clowns Don’t Make a Circus. . . and 249 Other Critical Management Success Strategies by Steven Schragis and Rick Frishman)


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