Have you reviewed your phone bill lately?

NOTE: Chaim Yudkowsky, CPA, CITP, is an MACPA member and chief information officer at Textilease Corp., a uniform and first aid services company serving the Southeast.

By Chaim Yudkowsky, CPA, CITP

Misocainea (a noun pronounced as mis-oh-KY-nee-uh) means "hatred of anything new." This hatred would characterize not only Luddites with their disdain and skepticism of new discoveries, but also many of us who do not want to change how we use long-established and proven technology.

One of those habits involves how we think about our business phone situation.

Because of the vital role voice and fax communication has in our businesses, we are complacent about reviewing our voice phone costs. Besides, dealing with local and long distance service vendors can be frustrating. Talking to a car salesperson might be less confusing and more rewarding.

Still, in the midst of belt-tightening and in light of how voice-related needs reflect corporate needs at a given point in time, the phone bill deserves special attention.

There are two options in performing this exercise. The first is to hire a consultant with some experience and a track record who can do this work for you, often at no charge unless you save money. The second choice is to perform this straightforward review internally in your organization. Even under the second choice, you should be able to find most of the guaranteed savings a consultant might find.

Steps in your voice service review

The review must be performed for each mailing address individually, since each likely has its own evolved waste. For each, you want to perform at least the following steps:

Ask your provider of local service for a copy of your customer service record for all the phone numbers you are paying for.
Trace every one of those lines and make sure that (1) you know where it goes and (2) it is working.
Match to and review your long distance bill to ascertain that you are not paying for long distance service on lines that are not on your customer service record. Interestingly, this error by long distance companies is not unusual.
Confirm that all the lines on the customer service records are included on your long distance carrier's list. Lines that are not included may have significantly higher rates per minute than your business rates.
Review your telephone trunk needs in view of any downsizing or resizing your company and location might have undergone. This calculation may be performed either by working with your service vendors (and relying on their guidelines for lines-per-phone-user ratios based on phone use) or taking advantage of the line calculators on some vendor Web sites.
Look for anachronisms like dial-out, toll-free lines (also called WATS lines) among the line charges on your phone bill. With inbound 800 service and outbound rates being what they are today, this is not necessary.
Pay special attention to an overabundance of modem lines. With broadband Internet connections to corporate networks being more available and data exchange more able to use Internet infrastructure, you might have opportunities here. Also, consider consolidating users to share a single line instead of multiple lines. Finally, these might present a security risk to your larger network when these lines are used in conjunction with software like pcAnywhere. Still, make sure not to eliminate lines that would be critical in responding to a disaster or emergency.
Analyze your phone usage (especially long distance) to understand what is most important. Then negotiate or renegotiate with your vendors. Despite the turbulence among the carriers (including now teetering WorldCom), now is a good time to find competitive rates. Focus not only on interstate calling, but also the prices for the usually more expensive intrastate / intralata calls. These tend to be higher per minute, since they are more subject to jurisdictional rate setting. This attention should be had for both inbound 800 and outbound dialing (otherwise called "1+ dialing").
Consider aggregating some inbound 800 service and let some of the routing be processed by the carrier. Consider there is a charge for every 800 number you have in light of the cost of any publicity or advertising you may have referencing that number. Though the 800 numbers are yours and are transportable between vendors, the cost per 800 number varies widely among vendors. Remember that the same local line can receive multiple 800 numbers. Do not keep local lines only because of the 800 attached to it.
Consider consolidating local POTS lines to a dedicated line with multiple virtual lines. A T1 line can handle 23 to 24 lines, depending on the breadth of service desired. This usually will translate to lower costs for 23 lines. Long-distance rates can be significantly lower on dedicated lines.

Telecommuting

Telecommuters present a special challenge in the desire to cut phone costs. In today's connected world, you would expect a high density of lines per person — cell, voice, fax and Internet access for a single home user. There are a few alternatives:

Share the fax and phone line using the local phone company's voice mail and fax queuing service. This service does not rely on a fax machine or answering machine to avoid missing every call or fax. All calls usually go through, even if the line is in use and call waiting is off.
Efax (EFax.com) offers a free and pay service that can obviate the need for a fax line by using e-mail as an alternative to the phone line. The home user can still have the private fax line.
DSL and (in some places) integrated cable services can offer some solutions to help keep costs down and productivity high.
Standardize voice service for these users on their cell phone vs. wired. Be careful about this option since home offices frequently are in the basements of reception-poor residences.

This is the simple way to clean up your telephone expense without any outlay. Upon analysis of some of the data gathered during this phase and improvements you might make throughout this process, you might discover you are ready to discuss voice-over IP and really evaluate it.

In my next column, I will discuss one excellent solution that I have come across that would be appropriate for multi-location businesses and how to really analyze it.

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