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What’s Missing #4 – How do MRC’s affect your P&L?

What does MRC (an acronym) stand for?

What’s missing that can increase profit? And more importantly how does it have a financial impact on your P&L?


You will likely see a MRC (Monthly Recurring Charge) on most invoices, which is the base price for your services charged by that vendor. This base price usually includes a group of services that are provided to you. For example, your telecommunication provider (ATT, Verizon, Sprint and all other telecom providers) may be bundling several telecom services into a bulk or combined MRC.

Most MRC’s contain multiple hidden costs that are grouped together under the one charge. Here are some examples (not all):

• long distance services
• teleconferencing
• inbound or outbound calls
• toll free service
• international calls

It’s more than the missing letters that are missing in the MRC acronym. If you don’t know or understand the terminology that is used in billing you may be missing a potential huge savings every month in telecom billing alone. Here is an example as it may apply to businesses with single or multiple locations.

If your business has a monthly reoccurring telecom charge of $595.00 in one location, every month, but because of a calculation or service error you should only be charged $450 a month – you are overpaying $95 a month or $1,140 a year per location. For telecom expenses that average $150,000 or more a month (30+ locations) 17% savings (due to errors) could mean $25,500 a year!

So how can you avoid missing monthly reoccurring charges that keep adding up?
Routine analysis and auditing of telecom bills will help reduce overall telecom costs if you know what to look for, understand the telecom acronyms and how fees are grouped – and know what actions to take in the case of billing errors.

First, you want to be aware of what those acronyms, abbreviations, codes etc… stand for in order to understand what fees and charges are being assessed by your vendor.

Second, breakdown your MRC and discover each charge that is “bundled” under this category.
Now that you have them broken down determine what they mean, and the amount or fee associated for each of the services that are listed? Do the fees match the original agreement? Are the services in the MRC all of the services that you have requested or need for your organization? No one wants to pay for something they are not using. Are there services that you do not need or did not request?

Thirdly, contact your service provider and obtain clarification on services and charges that you feel are in error. Telecom vendors are known for adding charges that may not be accurate for the services that you need. If you feel that your costs are an error, contact your telecom vendor to get a clear explanation of these charges.

Understanding each charge of YOUR bill is the key to keeping a watchful eye for any errors that may reoccur every month. Ongoing errors have a huge impact on profitability! Correcting errors in your MRC can significantly improve your P&L. Careful analysis and management can mean a leaner P&L.

Many of these components, fees, costs (reoccurring and one time) are often overlooked and are not questioned. Busy businesses continue to pay for services and contracts that are incorrect and are continually overcharged. Errors and overage charges in telecom billing components allow companies to be taken advantage of, and these billing inconsistencies are costing your company money!

Keep an eye on your telecom invoices to ensure that your company is not falling victim to unnecessary expenses. The next time you see an acronym you’ll be able to actually understand what it stands for and how it affects your P&L.