Carrier Pricing Negotiations Shouldn't Be the End Goal
Finding Budget for 2025 IT Initiatives
As 2025 approaches, IT leaders are setting ambitious goals for the future. According to the Forrester 2025 Budget Planning Guide for Technology Executives, nearly 90% of IT decision-makers expect their organizations’ budgets to increase—at least moderately—over the next fiscal year. A significant portion of this investment will be directed toward enhancing IT talent and expanding software capabilities.
To support these initiatives, enterprise procurement, IT, and finance teams are increasingly looking to optimize costs by negotiating more favorable deals with their service and commodity providers.
Telecommunications, in particular, has become a key focus for cost savings. Procurement teams are exploring ways to reduce telecommunications expenses, either by upgrading legacy systems to more cost-effective technologies—whether with the same carrier or new providers—or by using their purchasing power to secure better rates on existing services.
Negotiation is Only the Start: Achieving Telecom Savings Requires Further Action
While securing a favorable deal with your carriers may feel like a major achievement, the true test of savings begins after the contract is signed. Without vigilant oversight, negotiated rates can easily be lost in billing errors and discrepancies. It’s crucial to follow through with meticulous telecom expense management to ensure the agreed-upon rates are accurately reflected in every invoice, transforming negotiations into tangible cost savings.
Common Causes of Telecom Carrier Billing Errors
Carrier billing errors are not uncommon, especially in complex enterprise environments where new services are frequently implemented, existing services are renewed at different rates, or services are transitioned from one carrier to another. The potential for errors increases significantly during these transitions. For instance:
Implementation of New Services
New services may not be billed correctly due to miscommunication between sales and billing departments within the carrier organization.
Renewal of Existing Services at Different Rates
Transitioning Services Within Carriers
Upgrading from one service to another within a carrier can cause timing and rate billing errors with the existing carrier.
Transitioning Services Between Carriers
How Leveraging AMI’s Invoice Lifecycle Management Automations Helps Protect your Telecom Procurement Negotiations
For over 30 years, AMI Strategies has been a leader in telecom expense management, using industrial-grade invoice-to-contract audit automations to uncover billing errors quickly.
When a vendor invoice is loaded into AMI’s platform for the first time, a detailed inventory is created, capturing every identified rate, quantity, and description from the invoice. Each rate is then meticulously matched within the AMI platform to the corresponding page and paragraph of the contract, validating its accuracy.
Load
Invoice
Create
Inventory
Contract Rate Validation
But AMI’s process doesn’t stop at identifying discrepancies on the initial invoice. As each subsequent invoice is loaded, the AMI platform scans for any changes—whether new, modified, or deleted items—flags them for analyst review, and validates them against the quote, purchase order, statement of work, or change order. These updates are then incorporated into any MARC or SubMARC considerations in the master agreement.
Load
Invoice
Scan for Changes
Validate Changes
If any rate changes, the system immediately flags the discrepancy, and a dispute case is raised with the carrier. Furthermore, new or disconnected services are also flagged for review to ensure correct billing in terms of rate, timing, and quantity.
Investigate
Dispute
Credit
Telecom Credit Recovery: Why Persistence Is the Key to Success
Identifying a billing error, however, is just the beginning. Getting the carrier to adjust the rates moving forward and credit back for the months where the error occurred requires persistence, tenacity, and follow-through. While it may seem like a straightforward process—identifying the error, alerting the carrier, and receiving a credit—the reality is often far more complicated.
Carriers frequently drag their feet correcting misapplied rates and issuing credits due to several factors:
Limitations in Billing Systems
Complex legacy systems often make it difficult to implement corrections swiftly.
Sales Representative Turnover
Reluctance to Issue Large Credits
Carriers may be hesitant to have significant credits visible in their financial statements.
Approval Bottlenecks
AMI is NOT an Audit Firm that Works on Contingency
We are a Telecom, Technology and Utility Expense Management Firm dedicated to managing the entire lifecycle of service provider invoices, inventories and costs for enterprise clients.
Our fee model is based on a monthly recurring structure, and while we prioritize uncovering and resolving billing issues for our clients, they retain 100% of any recovered costs.
Chasing Telecom Credits: Would Your Team Give Up?
AMI Never Does
Even with the power to quickly identify and report a billing issue with a carrier, rate adjustments and credits simply do not happen overnight.
For AMI clients, carrier disputes are handled by their U.S.-based AMI Client Service Analyst (CSA), who uses the AMI Dispute Manager as their workbench.
Like how a CRM system is used to manage and analyze customer interactions and data throughout the customer lifecycle, the AMI Dispute Manager centralizes all dispute activity by carrier and account number, tracking every interaction and data point through the dispute journey from Identification to Negotiation to Credit.
With the charter to make sure our clients never pay more than they’re supposed to with their service providers, AMI CSAs are relentless in their pursuit of credits for billing errors, closing the dispute case only when a physical monetary credit has been confirmed on a subsequent invoice.
Here are a few examples and context of actual credits identified on AMI client invoices processed in August 2024:
Incorrect Discount Rate Applied
$40,000+ in Credits
An AMI analyst discovered a 10% discrepancy in the discount rate applied by a carrier, resulting in $1,000 in overcharges. It took over three years and $40,000 in credits to resolve the issue.
Renewal of IP-Enabled POTs Lines
$100,000+ in Credits
Contract Renewal Across 750+ Accounts
$1M+ in Credits
PRI Renewal Not Implemented
$4M+ in Credits
You Secured the Big Carrier Credit: Great!
Now What?
After completing the arduous journey of getting incorrect rates adjusted and credited, the final task is properly accounting for those credits within our clients’ cost allocation structures.
Oftentimes, carriers will put these credits in places that make them hard to account for, such as lumping credits for multiple errors into a single account-level credit.
Because the AMI Dispute Manager is a closed-loop system, as soon as the credit is visible on an invoice (no matter where that credit appears on the invoice), our CSAs can assign those credits to all the applicable disputes within the Dispute Manager, noting adjustments for taxes and fees.
By doing this, those credits are automatically assigned back to the general ledger codes the dispute originated from, ensuring proper accounting for any Bill of IT chargeback or showback initiative.
Transforming Historical Telecom Disputes into a Negotiation Tool
Using Historical Telecom Dispute Data as a Strategic Asset for Future Negotiations
Through the AMI Dispute Manager, all dispute activity is meticulously organized by carrier, master account, and subaccount, creating a comprehensive and easily navigable repository of dispute history. This detailed categorization enables procurement teams to gain deeper insights into patterns of billing discrepancies, recurring issues, and the overall reliability of each telecom provider.
By having access to this organized data, procurement teams are better equipped to approach future negotiations with a solid foundation of historical evidence. They can quickly identify which carriers have a history of billing errors, the types of errors most frequently encountered, and the timelines required for resolution. This knowledge not only enhances their ability to negotiate more favorable terms but also allows them to anticipate potential challenges and proactively address them in contract discussions.
By analyzing trends across accounts, procurement teams can also prioritize negotiations with carriers that have been less reliable, consolidate services with more dependable providers, and ultimately drive greater cost savings. The AMI Dispute Manager turns historical challenges into strategic leverage, empowering teams to negotiate with confidence and secure the best possible deals for their organizations.
Explore More:
Related Reads on Telecom Expense Management
Key Takeaways for Enterprise Procurement and IT Finance Teams
Completing the Telecom Rate Negotiation is Just the Beginning
While a lot of effort goes into the negotiation process, it’s essential for enterprise procurement and IT finance teams to have the proper tools to quickly catch and report billing errors.
This is particularly important when ordering new services, upgrading from legacy services, changing providers, or renewing services at different rates.
Even with the right tools, persistence and patience are required to correct billing errors and secure credits. Most enterprises may give up before the carrier issues the credit, which is why having a partner like AMI Strategies by your side is invaluable.
Final Thoughts
Empowering Your Telecom Procurement Strategy: AMI as a Key Tool in Your Arsenal
While securing a favorable deal with your carriers may feel like a major achievement, the true test of savings begins after the contract is signed. Without vigilant oversight, negotiated rates can easily be lost in billing errors and discrepancies. It’s crucial to follow through with meticulous telecom expense management to ensure the agreed-upon rates are accurately reflected in every invoice, transforming negotiations into tangible cost savings.
With AMI Strategies, enterprise procurement, IT, and finance teams can confidently navigate the complexities of enforcing carrier agreements, knowing they have a robust partner to help identify, recover, and report on every billing error that can occur.
David Sonenstein - Vice President of Product Strategy
AMI Strategies
With over 20 years in the industry, David helps orchestrate AMI’s vision for vendor hyperautomation. While contributing to AMI’s adoption of automation technologies, system integrations and technology frameworks, his research focuses on enterprise market and technology trends and where automation solutions can help organizations achieve their desired business outcomes. He currently serves on the executive board of the Enterprise Technology Management Association (ETMA) and is an associate of the Technology Business Management (TBM) Council.
