Here are the key questions that a management team should consider as part of a focused cost reduction program:

– Have we set a target, and how do we know it is achievable?

– Do we require more transformational change?

– How quickly do we need to get the cost out? Next month? Next year?

– How can we align cost targets with organizational priorities?

– Can we dedicate the team to the project envisioned, or do we need help?

– What should our PMO look like (size, structure)?

– Have we considered what the necessary reporting and tracking looks like?

– Do we have a change management plan in place?

– Can we create a better cost culture going forward? How do we keep costs from creeping back in?

– Do we have the right team and leaders to get the job done?

That last question is one that management teams do not consider often enough. Most organizations have in-house resources that are very capable of managing day-to-day operations. Every organization has the potential to conduct audits of their billings, renegotiate their vendor contracts, and achieve some degree of significant savings. However, working with an outsourced service provider that brings a broader set of tools and experience to the team can often produce better results.

Outside experts have superior vendor management expertise, access to document management technology, and an understanding of benchmark analytics that vendor management staff would rarely be able to acquire on their own. Bottom-line: implement a strategy, challenge the status quo, and make sure you have the right resources in place to optimize your profits.”

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA, saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms we utilize technology, processes, expertise, time, and resources to improve our clients bottom-line. Limitless Technology manages your vendors, so you can manage and grow your business.

No business should have to feel they are “on the watch” for changes in their contracts and agreements.  This includes those special “1-year promos” that are deigned to take advantage of companies who get complacent and don’t audit their billing. So instead, the price rolls to the current market retail prices which is usually DOUBLE the promo rate!  Now the service provider should INFORM their customer more clearly of any changes going into effect, clearly state them and offer cost saving OPTIONS?Well, I think we can agree that this is is NEVER going to happen!

Example from frustrated Corporation Manager:

“They didn’t put us on any plan after the expiration, but after I contacted them they supposedly put us back on it and told me to only pay what we were paying prior. It was a big fiasco and has been. I was not under the impression it was only a year thing, but I will contact them and my director to see how they want to proceed if we want to stay or go with another company.”

“I did speak with them and it has taken 5 phone calls over the course of 6 months several disconnection notices that they claimed to me they were going to adjust our account. Again just the other day we received another disconnect notice and I called them on Friday and apparently they only issued us an adjustment from December forward for some reason not November when it had started, and they are saying whatever the promotion was parts are not available.” – P.C. Orinda, CA

Let’s be very clear about this:  This treatment is “vendor abuse”. Service providers have had the ability for MANY YEARS to take advantage of their Clients, and most often do. Unfortunately, that means the business has only 2 options:

1. They can have an internal staff spend hours trying to keep up with the renewals, inventory, billing changes, audits, inspections, expired warranties, agreement promos, 3rd party charges and all the other aspects of contracting with vendors.
2. They can entrust these services to a company that provides a fully managed vendor and supplier service which includes; proprietary software, monthly bill auditing, proactive contract management, document management, compliance notifications, increased efficiency, and maximized profits.

 The choice seems pretty darn simple, doesn’t it?

Imagine all the hours FREED up from resources not having to deal with the frustration of vendor management. Having an EXPERT auditor, contract negotiator and accounts manager creating your unique profile including analytics and visibility into all spend. Having the ability to access all documents, contracts, bills, renewals, compliances, and warranties from ONE CENTRAL LOCATION – 24/7.  That is right, even while key vendor management resources are on vacation or away from the office for any reason,  when an important contact, bill or document is needed it is easily accessible by anyone with credentials.

We understand and respect the services the efforts that internal vendor management resources provide.  But sometimes, they simply cannot dive deep into every bill or invoice and provide the most optimized approach to improving your bottom line.  Sometimes, the only way to do that is by working with cost reduction specialists who do it every single day.

But not every vendor relationship is created equal. A true, risk-based approach requires organizations to first segment their vendors based on pre-determined criteria, and then establish an appropriate level of ongoing due diligence and oversight activities based on the assigned level of risk. And while the specific activities may vary across organizations, there are three types of risk you want to be sure to address.

• Operational Risks
• Financial Risks
• Regulatory Compliance Risk

OPERATIONAL RISKS

Operational risk is the risk that your organization will experience a major failure, shutdown, or unexpected disruption of some segment of your business if a vendor’s processes, people, or systems fail. The operational risk goes hand in hand with your reliance on a vendor and is typically higher with vendors that provide services such as outsourcing, IT systems, and data.

There are two good ways to take a proactive approach and mitigate operational risk: perform periodic on-site and/or due diligence reviews and create a contingency plan should you experience a failure with a risky vendor. These two risk-mitigation activities go hand-in-hand, especially for mission-critical vendors. Monitoring daily performances that don’t meet the standards required is also a good indication that in a time of risk there is a higher risk of disruption or failure.

FINANCIAL RISK

Financial risk is the risk that your organization is negatively impacted financially due to a vendor relationship. This can come in two forms: excessive costs and lost revenue.

Poor Vendor Service due to Finances

Many supplier performance issues are related to finances.

Deliveries were late, and shortages were piling up with no relief in sight. The primary supplier was actively blaming the secondary supplier for the bottleneck, claiming that their supplier was behind in their coating process. They began casting aspersions on the supplier’s lack of process control, communication and even hinted at ethical issues.

While the protocol was for the primary supplier to manage all downstream relationships, this problem had escalated high enough that it was time to call the supplier directly to get to the bottom of the issue and develop a get-well plan.

Negotiating and Enforcing Contract Compliance

Organizations understand the importance of managing competitive solicitations and negotiating good pricing. But negotiating a good price has little to do with managing costs, which comes from enforcing contract compliance, effectively managing the procure-to-pay cycle, and performing periodic cost and contractual audits. It’s the work done after the vendor contract is negotiated that mitigates the risk of excessive costs.

The other financial risk relates to the reliance on vendors who support your revenue-producing activities. Examples include fundraising companies, outsourced service providers, and fulfillment centers, to name a few.

It may also include vendors whose technologies you use to process financial transactions. Problems with these vendors may delay access to revenue or, in the worst cases, result in lost revenue for your organization.

It’s important to identify and segment these types of vendors to design the most appropriate diligence and oversight activities and to also integrate with your vendor management operational risk planning as it relates to contingencies.

Regulatory Compliance Risk 

This has become a HOT TOPIC in many industries. Nonprofit organizations like health plans, healthcare systems, and credit unions, along with those that receive Federal grants, are heavily regulated by Federal agencies. And in many cases, certain regulations pass through to third-party vendors.

Regulatory compliance risk is the risk that a third-party vendor will violate a law or regulation that your organization has placed on them as a requirement for doing business with you.

Ensure your risk management activities enable you to evaluate how well your vendors are complying with the appropriate laws and regulations.

Even though a supplier may be remarkably reliable, the fact that their component or ingredient is essential to your finished product makes them high-risk. Partnering with a company that oversees these risks to proactively avoid business disruption is key to avoiding potential problems.

Audits aren’t just necessary for validating new suppliers––they’re an important tool for maintaining quality and compliance over time. The recent rise in outsourcing only further underscores the importance of having a plan in place to conduct regular evaluations led by skilled quality professionals.

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms, we utilize technology, processes, expertise, time, and resources to improve our client’s bottom line.

Limitless Technology manages your vendors, so you can manage and grow your business.

For Additional Information Contact us at 407.330.4466

Automatic Renewal Clauses (“ARCs”) or AUTORENEWALS can be golden for business. But for all their perks, ARCs are notoriously problematic. They may irritate customers who’ve missed the termination window, trap businesses in undesirable ongoing agreements, and undermine the validity of entire contracts. They act to perpetually renew a contract when no notice has been given to terminate it. So how can a business ensure they manage their autorenewal contracts to avoid termination penalties, increased fees, and being locked into an unwanted contract.

Keys to Managing Auto Renewals, Todd Larsen, CEO

3 Keys to Managing Autorenewal Clauses

ONE.

When you sign a contract set a recurring alert as a reminder to review the agreement. Organizations especially those with multiple locations have numerous contracts and agreements. Managing them ALL can become overwhelming. In most cases after the contract is signed, it is FILED and FORGOTTEN! Therefore, managing every contract and agreement is a must or the organization can easily miss autorenewals costing them thousands.

TWO.

Review the contract portfolio completely periodically. While it is certainly important to negotiate the best bargain for the organization, contract risk management increases IMMEDIATELY AFTER contract execution. Collecting autorenewal contracts with an unspecified duration for analysis can be TRULY illuminating! Questions to ASK …

• What percentage of all contracts are autorenewals or unspecified?
• How long ago was the oldest review?
• What types of contracts are auto-renewed? What departments, divisions, or subsidiaries are producing the most autorenewal contracts?

THREE.

If you chose auto-renewal contracts TAG them appropriately. One of the MOST COMMON MISTAKES made by finance, legal, and contract management departments is to open the spreadsheet of contracts and leave the “expiration date” blank. With a blank entry, it is not clear whether it was forgotten or if an expiration does not exist.

Most organizations have autorenewal contracts in their portfolio. Chances are that no one knows how many, how much money is at stake, and what the consequences are. With the three simple steps above you can help your organization master these challenging agreements.

The LIMITLESS Vendor Management Solution (VMS) Software is: fully managed software, enterprise-based, and generates high-level spend and vendor management metrics. VMS provides a SINGLE SOURCE tool providing transparency and visibility into all vendor management processes, documentation, invoicing, and costs.

Imagine all of your vendors at your fingertips in one FULLY MANAGED software solution. Tracking and managing contract auto-renewals is only one of the features of LIMITLESS VMS.

With a Vendor Management Solution, contract experts can negotiate a fixed rate for a particular service. The contract terms must be met ensuring that both parties are aware of what is expected and any variances will be flagged and the vendor will be held accountable for any charges and changes outside of the agreed terms.

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms, we utilize technology, processes, expertise, time, and resources to improve our client’s bottom line.

Limitless Technology manages your vendors, so you can manage and grow your business.

For Additional Information Contact us at 407.330.4466

Operational staff and process owners don’t always understand the complexities of the initial contract. It is signed and filed – end of the story. However, the question remains… is the contract still measured for performance, ensuring nothing which is critical during the life of the contract has been overlooked or omitted?

Management teams can deal with hundreds of contracts at once, so it is easy for a contract term, condition, or renewal to slip through the cracks.

Here’s the nightmare. Imagine working months or years, ushering a deal through the process, only to miss the renewal and miss out on the revenue reduction that comes with it. That revenue has been forecasted from the beginning of the contract cycle, so now operations and finance need to go back and adjust their numbers to reflect the loss. This is not only time-consuming but also carries no guarantee the vendor will honor the rate reduction now or in the future.

On a day-to-day basis, your managers oversee all aspects in relation to your company’s contracts. With so many moving parts in your fast-growing organization, managing these contracts can become a real problem if you are not equipped with the right tools.

Many companies ARE getting ahead of this problem by finding a partner with the tools and expertise to manage the details, as it relates to local, regional, or even national service-related costs. They need a partner they can trust, that will do the benchmark analysis on every single vendor, ensure bills get paid on time and services providers aren’t taking advantage of you, and actively renegotiate for lower pricing and better T&Cs, ultimately resulting in the elimination of “spend fat” and more strategic use of budgets.

A fully managed vendor management solution simplifies contract management lifecycles, making it easier on your staff, compliance team, and legal department. This IS what our team at Limitless does All Day and Every Day. We take this burden off of your people so they can focus on the bigger problems. Plus, we partner with each member of your team, so they feel confident that they can maintain the overall control and don’t lose the vendor relationships they value but DO gain the critical support they need to make better decisions. The support we provide allows your team to focus on the more important work of ensuring occupancy rates, delivering exceptional resident experiences, and growing their business and market share.

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms, we utilize technology, processes, expertise, time, and resources to improve our client’s bottom line.

Limitless Technology manages your vendors, so you can manage and grow your business.

For Additional Information Contact us at 407.330.4466

Those that lead IT teams should harness this urge for savings by identifying experts (internal and external) that can streamline and standardize vendor processes. At the same time, these experts can reduce the costs that leadership seeks while creating a more organized and cost-efficient structure.

Read more to see a system many IT leaders have implemented across industries to help optimize billing and produce costs savings.

Outsourcing vendor management to a third party will also help standardize processes; and consistency helps enable the transparency essential to effective governance. This helps to alleviate flawed data, and costly mistakes.

Our software will not only house every contract, service agreement, warranty or renewal agreement, but we also manage negotiations for better rates and terms saving your business from unnecessary fees and costs while maintaining quality standards. If you have questions regarding how to manage vendor contracts/agreements or would like more information regarding our fully managed vendor management solution contact LIMITLESS at (866) 504-4050.

“Through 2019, EVERY dollar invested in innovation across a business will require an additional $7 in IT execution, which SVM leaders will have to manage,” said Claudio Da Rold, research vice president and distinguished analyst at Gartner.

Knowing the statistics on levels of investment, every business leader has a 7x greater reason to look more deeply into their IT operations and the vendors they choose! The question to ask is, “How do C-Level executives choose the right IT partners when knowing the cost to their organization is incredibly high?

How Do Executives Select the Right IT Vendors?

• When choosing the right vendors and suppliers, there are a few areas of focus:
  • Can the vendor handle the breadth and scope of infrastructure to handle the projects assigned?
    • Proper capabilities
    • Infrastructure in place
  • Does the vendor have a proven record of performance?
    • A History of achieving prior project deliverables
    • Recommendations of business leaders in similar industries

These points are a simple guide to assist leaders in determining the correct resources for their organization when a company directive is rolled out and a new IT resource needs to be chosen.

After Executives Select the right Vendors, Are Systems in Place to Manage Them?

A strong external IT resource will still need a focused system in place to manage their day-to-day impact on your business. However, one major problem in the IT industry is that company’s internal IT teams don’t have the time and, in most cases, the resources to manage their IT, Telecom, and VOIP systems at a micro-level. They are too busy managing the system-wide issues that arise daily and impact employees’ productivity on a ground level.

Often, IT teams leave secondary issues to handle a later time. The problem with these issues is that they often lead to costly expenditures for the organization. A short list of examples below:

• Products/services that are no longer needed by the organization due to a structural change in the business
• Billing discrepancies caused by disconnect from ground-level teams
• Small issues impacting individual locations as opposed to company-wide outages

C-Level executives need to understand the cost impact leaving these issues unresolved can cause their organization. A cost-effective strategy is to employ a third-party organization with the skills and ability to manage the above issues, so that internal resources can focus on “putting out the fires” that are an immediate need.

Find out more about our company and how we assist in managing both processes here.

This includes IT services, office supplies, delivery services, utilities, rentals, and the goods needed to run business day to day. GET entire list of vendors here. When you consider the myriad of services and supplies businesses need in order to operate strategic management of those service providers and vendors – they need to be first and foremost the core of importance, but you’d be surprised at how often it isn’t.

Most companies might think their vendor management solution is “just fine the way it is”, and in some cases that might be true. The real issue is that only a few businesses know exactly what to even LOOK FOR or even where to begin, and without that information they might find that their current process is lacking in more ways than one.

So how do you ensure you have the BEST VENDOR MANAGEMENT SOLUTION?

You must consider availability of all billing, agreements and documentation. How easily accessible is every document related to every vendor? How updated is the information? How efficient is the management process? Do you feel any time is wasted in finding, organizing, interpreting and optimizing? Is billing fair? Are there any errors in billing, oversights, overcharges or invoices for services not even rendered? How often is all vendor related information from billing to contracts evaluated? Rated? What about the quality of the service … Is quality being accessed?

Vendor management is more than getting the lowest price. Most often the lowest price also brings the lowest quality. As the saying goes: “you get what you pay for”. Be careful not to short-change the vendor by trading off quality as this could have a profound impact on your own business. The key is for BOTH SIDES to align on what constitutes as quality and a good value. You and your vendors should be willing to negotiate a fair price while receiving the expected quality. If the vendor is serious about the quality they deliver, they won’t have a problem specifying the quality details in the contract.

Because vendor management inherently means dealing with a great deal of third party businesses, services and providers, it would be ridiculous to assume that one solid strategy will never need tweaking, reviewing and changes as time goes by. Vendors change their prices from time to time and in order to ensure you get the best deal, it’s important to keep an eye on any new pricing, billing or contract changes that could either benefit or hurt your business.

Reevaluating vendors is an essential part to ensuring the “best for the best”. Every time you reevaluate, you’ll find changes – be it somewhere you can save money, somewhere you can optimize efficiency and performance, somewhere you can spend less resources and so on. For these reasons, it’s important to deal with a vendor management service that is always thinking about what to do next…

LIMITLESS offers a fully managed solution to ensure you are “paying for what you are receiving”. Ensuring contract terms are met as well as compliance standards. Tracking any potential risks, optimizing your billing and managing all contract and agreements in one central software solution.

Outsourcing vendor management to a third party will also help standardize processes; and consistency helps enable the transparency essential to effective governance. This helps to alleviate flawed data, and costly mistakes.

Our software will not only house every contract, service agreement, warranty or renewal agreement, but we also manage negotiations for better rates and terms saving your business from unnecessary fees and costs while maintaining quality standards. If you have questions regarding how to manage vendor contracts/agreements or would like more information regarding our fully managed vendor management solution contact LIMITLESS at (866) 504-4050.

RESOURCE: https://seniorcare.levinassociates.com/2018/06/15/cash-is-king-for-skilled-nursing-targets/

Recently, an article was placed by The Senior Care investor which read:

“When buyers value a skilled nursing facilities, or any senior living property, it is always the absolute level of cash flow (NOI) that matters, not the operating margin or expense ratio. Buyers are purchasing a stream of net cash flow, and that net cash flow is going to provide the returns to capital providers. As long as cap rates remain stable, which they certainly have in the skilled nursing sector, when cash flow increases, the prices paid increase.”

From 2008 to 2015, the average cash flow per bed of SNFs sold increased by 63% (peaking in 2015 at $9,600 per bed), and this was driving the five straight years of record average prices for skilled nursing facilities, according to the 23rd Edition of The Senior Care Acquisition Report https://products.levinassociates.com/downloads/scar23/ . Although there was a small dip from 2015 to 2016 to $8,800 per bed, just as the average price per bed peaked in 2016, the simple average does not always tell the story. In 2017, there was a very small decrease in the average NOI per bed for SNFs sold (a 3% drop to $8,500 per bed), but the average price per bed plunged by 18%.

The reason is that when we recalculated the statistics on a weighted average basis, the NOI per bed sold dropped from $12,100 in 2016 to $9,450 in 2017, representing a nearly 22% decline. This clearly explains the 18% drop in average prices, given average cap rates were almost identical in both years. The $12,100 figure also explains why the average price per bed peaked in 2016.”

For illustration purposes, for every $50,000 that drops to the bottom line, applying a 13-14% cap rate could potentially equate into $350-380k in additional value to the portfolio.

So, if “cash is king” then, having the highest profitability and least amount of operating expense ratios is imperative to the true “total success” or evaluation of a property, ownership and management. Taking these facts into consideration, everything possible should be done to drive costs out of your business (without sacrificing great service deliverables) with your vendors. Problem is…most people do not understand or believe this is possible. The internal thought is…

• “we couldn’t be being that much overcharged by our vendors”
• “you pay for what you get”
• “my people have that covered”
• “we have that covered”
• “I don’t want my service to go down because I am paying less”

These “big misses and paradigms” must shift in order to have the best operation, and most profitable entity.

While this issue remains for many companies, smart companies ARE getting ahead of this problem by finding a partner with the tools and expertise to manage the devil in their details as it relates to local, regional even national service relate costs. A partner they can trust, that will do the benchmark analysis on every single vendor, actively renegotiate for lower pricing and better T&Cs, ensure bills get paid on time and services aren’t shut off, and ultimately resulting in elimination of fat and more strategic use of budgets without losing strong deliverables from vendors.

This IS what our team at LIMITLESS does All Day and Every Day. We take this burden off of your people – so they can focus on the bigger problems at hand. We partner with each member of your team so they feel confident they can maintain the overall control, won’t lose the vendor relationships they value but, WILL gain the critical support they need to make better decisions. The support we provide allows your team to focus on the important work of ensuring occupancy rates, delivering exceptional resident experiences, and grow their business and market shares.

Don’t hesitate to stop the waste, and increase your profits now…and when it comes time to sell.

Contact LIMITLESS today for a FREE CONSULTATION to discover how to get control of your unmanaged spend and reduce expenses in your business.

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Important Agreement signed last week. You ask yourself … “Where is that Contract – I know it’s in HERE somewhere I just saw it last week. I know it was filed … Account name or by service? I can’t find it!” Meanwhile, management is still in meeting waiting for the signed Agreement.

How REFERENCEABLE is your CURRENT VENDOR Database? How quickly could you retrieve files, agreements, contracts, vendor contact information or a particular invoice by date or total amount PAID? How can those documents be retrieved “from another location?”

LIMITLESS Vendor Management Solutions is THE Vendor Management Solution Software that brings Superior Spend Analytics and Visibility within a FULLY MANAGED software solution. Contact LIMITLESS for more information.