Monday, July 20. 2009Our Major Suppliers Keep Us Poorer......John Linton ......and cause us more problems and waste more time than our customers. It has been progressively more difficult to check our bills from our major suppliers as the years pass. We have developed automated processes to check each suppliers bills as, of course, they are all in completely different formats from supplier to supplier and in the case of most suppliers their billing formats also vary service by service. It's impossible to check some supplier's bills even with our most sophisticated code for all sorts of reasons but they are all related to the fact that, amazing though it may seem, some our largest suppliers have really inaccurate invoicing systems and, even more amazingly, some of them have 'semi manual' billing systems that generate very large billing errors. There is not a single major supplier to Exetel that consistently submits accurate bills and it is costing more and more each year to continue to write code that copes with the ever changing processes most carriers use to submit their bills. Even worse is their attempt to cope with their 'special discounts' which while they negotiate various terms in the supply contracts they are unable to incorporate these new terms in their billing software for many months (sometimes not at all) resulting in our continually having to ask for credits having to be applied every month for the duration of the newly negotiated terms and it actually isn't unusual for the credits not to be properly deducted once another new contract is negotiated. I read this with interest: http://www.news.com.au/heraldsun/story/0,21985,25798009-664,00.html yesterday because it will be interesting what at least one of our major suppliers achieves in terms of 'compensation' from Telstra for over billing for the past twelve years. I wonder whether they will pass on any savings they may subsequently receive to their wholesale customers? Not very likely I wouldn't think.....but it is an interesting concept...however it is not something that is likely to be seen as being capable of being dealt with. We will now need to spend a considerable amount of time (and therefore money) addressing the various anomalies in at least two supplier's inaccurate billing and their attitudes with dealing with 'billing disputes'. Writing new versions of the bill checking code is an ongoing process but it is one that, at least in theory, we can deal with completely by spending time developing the current bill checking software to meet the needs of the constantly changing supplier billing formats. At least that's the theory. As we have bought more services our suppliers seem to got progressively further behind in writing new billing processes that sensibly address the new circumstances and we are left with progressively more disputes that make a progressively bigger mess that needs progressively more 'meeting' time to resolve the 'disputes' manually. We can sort most of these issues out by spending more and more time with 'meetings' to agree manual adjustments. In the case of one major carrier's recalcitrance we are unable to reach any sensible resolution of their implacable intransigence and I have reached the view, after many years of simply writing off their over charges, that we will use the court processes available to us to reach a resolution on what we consider to be their total unreasonableness. The trouble with doing that is that they have always used the court system to spin out any court based resolution for as long as possible relying on the fact that small companies like Exetel simply don't have the money to seek a legal resolution of their refusal to behave rationally or reasonably. To date whenever we have reached the view that we have had to 'grin and bear it' because as the cited article alludes to - large companies rely on long drawn out court 'defences' to prevent 'justice being done'. We have now found a way round that problem, at least we think we have. Rather than seeking a resolution of what we consider to be their unreasonableness in general we will use the lowest level of the NSW court system (the local courts) to seek resolution of each individual small claim and use the big companies legal overheads against them by going to local courts in different suburbs and towns around NSW to seek a court judgement by the local magistrate to refund us trivial sums of money on individual disputes - amounts less than $A200.00 at a time - but file several hundred claims in more than 100 different local magistrates around NSW. In theory this will result in very substantial legal costs to the supplier who chooses to use "because we say so" as their response to refusing to provide credits that are clearly due. I don't know how this will work out in practice but it seems that there is no option. The credits that have initially been refused over the years (by several suppliers) have reached over $A3 million which is a gigantic sum of money for a small company like Exetel and one that if we hadn't spend so much time and money resolving would have put us out of business a very long time ago. My best estimate of the amount of money we are now being over billed each month is between $A80,000 and $120,000 of which we only recover less than 70% and more often than not lately, closer to 50%. For a company of our small size that is a very serious financial problem and due to the bullying attitude of at least one supplier causes us a serious financial hardship that if we don't take some very serious action will continue to become an increasingly heavy burden on Exetel and may become even more serious than that. I really hate spending money on legal costs but it seems we have no alternative but to take the actions we propose to attempt to overcome the attitude of "what we say is right/what you say is wrong". I am heartened to see the ACCC 'hang in' for so long achieving their eventual 'win' over one major Australian carrier......perhaps there is some justice in the Australian court systems.....just too expensive and time consuming for many people or companies to afford. I hope we won't have to wait twelve years to solve our own far more more minor and trivial problems. Trackbacks
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What happened to the idea of selling Exetel's bill checking software to Australian businesses?
Comment (1)
We may still do that after the next round of up dates.
Comments (5)
i love the concept of the small claims.
it is potential remedy that is forgotten by business. it was a strategy used by a very tiny business i was involved in over 20 years ago. the amounts involved were small and nothing like your amounts....but it places the choice of where to play it out in your hands. it particularly worked when the court was local to the persons business workplace and business reputation. the only problem is that in my experience the defendant could drag it out over up to 3 hearings by simply not turning up....which was time consuming for us (or a legal cost if you are represented) we were working without lawyers so i am sure you will do better even with advice there were only a few such cases we had, as word went out that a bill from us was expected to result in the sending of money in a reasonable time Comment (1)
Nice to hear - "there is nothing new under the sun".
Comments (5)
John, I wish you all the best of luck! I'm sure we would all love to hear how it turns out once you've tried this tactic; another blog entry in a few months, perhaps?
I've been bullied on an individual level in a similar manner, by someone with far more money than me continually threatening prolongued court action to force me into doing things his way. The Australian legal system is unjust and unfair. If you can win this way, I for one will cheer for you! Comment (1)
If you want the "law" you go to court, if you want "Justice" better go get it yourself...Bruce
Comment (1)
One word to describe your idea of using the magistrate court.
Awesome. There is little I find more satisfying than getting my money back from a company using courts who's purpose is to resolve small disputes. I encourage you to post details of the ongoing battles. Comment (1)
It wasn't my idea - it was thought up by our Compliance Manager who has to put up with the outright lies told by some suppliers with their smug statements that "and there's nothing you can do now".
Comments (5)
maybe I am being a cynic, but what is the bet that they will spend more effort on figuring out a strategy to get around your tactic, than they will on fixing the actual problem with their billing system.
Comment (1)
a highly likely scenario..then we'll have to think of something else.
Comments (5)
In reference to the local courts, you really need to find a solicitor that really knows small claims. If what I've witnessed, many of them do not have a clue. The only ones who do, e.g insurance company reps, are complete bastards.
There are certain rules about which courts apply, aka your business location, or their business location. If you are targeting the one supplier, they will simply write a letter asking that it be moved to their local court and the decision is made according to the rules. When it finally gets to court, you need everything documented, i.e what they offered to sell you the service for and what they charged you. It needs to be very clear and in writing, otherwise you are just going to do your lodging fees, up to $620(?) for their fees and any costs of lodgement they incurred. Also, you might need to have an expert state the bleeding fornicating obvious. You will be treated as a moron and your claim can be rejected on some simple calculation you used. It will not be decided by a magistrate, but an accessor and collectively they have absolutely no concept of reality and common sense. The final gotcha, they can counter claim against your claim and if your claim plus their claim goes over $10,000, it moves to the higher court where the legal fees of the other side are not capped. The NSW Small Claims system is just thuggery and extortion by words. Comment (1)
Happy to suggest a couple of good contacts I had in a previous "lives" dealing with small claims in NSW.
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Thank you - but we will use our long term legal advisors who have been both good business advisors and good friends for over twenty years.
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