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The Business Consumer's Advisor

DAVIE

Davie residents will pay less for trash pickup, while business owners will pay more under a garbage contract Town Council members approved.

Town Council members on Wednesday awarded the five-year contract worth $50 million to Waste Management, the town's current hauler, amid concerns from some residents and business owners about billing errors.

Joe Cammisa, owner of Char-Hut, where $4.13 cheeseburgers are grilled on an open fire, said he may have to increase his prices.

Under the new contract, which becomes effective Oct. 1, single-family homeowners will pay $17.20 a month, while business owners and owners of multifamily dwellings, such as condos, will pay $13.06 per cubic yard.

It's a $4.67 savings for residents who currently pay $21.87 per month, while businesses and condo residents will pay $2.68 more per cubic yard.

Cammisa said the new prices mean he will pay $300 more a month at his two Davie businesses.

Not all business owners have the same service and some are billed more than others, said Tony Spadaccia, manager of governmental affairs for Waste Management.

In July 2003, the town hired Parkland-based Expense Reduction Consulting to perform an audit of the town's waste hauler.

Victor Ronder, president of the consulting firm, said he found $680,000 in franchise fees that Waste Management owed the town. The town collects 12.5 percent in fees on the $50 million contract.

''You're going to have some discrepancies,'' Mayor Tom Truex said. ``It's an honorable thing if they already paid some money.''

Truex was referring to a $250,000 check Waste Mangement gave the town in April.

Spadaccia said his company gave the money in good faith.

''We wanted to step forward and show good faith until we had a resolution,'' he said.

In a world where there is an increasing demand for productivity and speed of information transfer, the trend of outsourcing has not only staying power but is a flexible option in minimizing cost. That's where Expense Reduction Consulting, Inc. (ERC) comes in. ERC is a national procurement outsourcing group formed in 1993. Their main purpose is to assist companies in reducing overhead by helping them purchase more effectively. ERC is not into selling products, but does make recommendations and negotiates on the behalf of their clients. In addition to their strategic methods, they partner with a select group of expense category specialists as well. This is to ensure that their clients receive a thorough review of all applicable expense categories.

It makes sense to want to save a dollar wherever you can. Outsourcing is a great business strategy and relationship model. It creates flexibility, and offers the model of being able to focus on other core concerns within your business. ERC's clients have reduced overhead on a long-term basis, which creates longevity within a company, especially during recessive times. Victor Ronder, President and CEO says, "We help clients manage and develop their businesses along with suppliers."

In today's competitive environment, reducing overhead is as important as increasing sales. "We help clients generate savings by consolidating suppliers, and help renegotiate deals to save them money," says Ronder.

At Expense Reduction Consulting, they zero in on the most common profit leaks and show you how to eliminate them. ERC might be able to negotiate a better deal with the existing supplier or find a benefit from using an alternative source.

Even small and mid-size firms can diminish significant amounts of money on basic overhead expenses. Ironically, any expense category may seem unimportant but when added together, they quickly multiply into thousands of dollars. ERC does not endorse cutting employees. Instead they show people or purchasing departments how to cut expenses, and maintain better quality goods and services at a reduced price.

ERC begins by targeting those categories specific to each business where there is potential for greater savings. After reviewing the purchasing records and determining your needs, they renegotiate with the current suppliers and provide introductions to alternative sources. ERC can measure out options and make written recommendations. After it has been established as to which supplier will be utilized, they assist in the implementation of the programs. ERC works on a contingency basis. There is absolutely no risk to you. No fee is charged unless your company saves money as a direct result of their efforts. "We share the savings with you over a specified period of time. After that, the savings are all yours," Ronder replies with great satisfaction. Every penny counts. FEM

The accounting industry both nationwide and in Florida underwent some major changes in 1997. To be sure, 1998 will be an interesting year as the reverberations of those changes are felt. First, two major mergers of national accounting firms were announced: Coopers & Lybrand with Price Waterhouse, also, Ernst & Young with KPMG Peat Marwick. However, the mergers await regulatory approval. The consolidation of the Big Six to four is sure to have an effect on South Florida

In Florida, the groundwork for major change in the industry was laid this year. The state passed legislation effective in October that allows CPAs to work for clients on contingency, accept commission on new services, advertise the CPA designation together with other designations and allow non CPAs to own up to one-third of an accounting firm

Victor Ronder considers himself to be one of the first to take advantage of the new rules. Ronder has begun soliciting CPA firms for referral business, offering them a split of his commission.

His business is called Expense Reduction Consulting. Its purpose is to assist companies in reducing their overhead. Ronder meets with a company's vendors and gets it better deals on such expenses as telecommunications, payroll, office supplies and printing. He has helped a statewide child-care provider save more than $2,000 a month on bottled water and a freight forwarder save on its purchase of large quantities of lumber. He collects 50 percent of a company's savings, paid to him over 24 months.

"I've always attempted to network with CPAs because if I get a referral from a CPA it is golden," Ronder said.

Richard Kron, managing partner at BDO Seidman in Miami, said his mid-size national firm has been approached by businesses such as Ronder's but has chosen more of a wait and see approach.

"On a national basis through our legal counsel we are studying the statute to determine what we can and can't do. Most national firms are proceeding slowly. Smaller firms always have been a bit more aggressive," Kron said. Indeed small local firms like Arthur Tennenbaum and Co. already have moved into action. The seven-person accounting firm has practiced in Fort Lauderdale for 30 years. Recently its partners formed a separate company to sell financial services. Its first employee is an insurance agent.

"When the law passed we had discussion here," said Gene Weitz, a partner in Arthur Tennenbaum and Co. "We weren't happy with the way the profession is going. But we felt if we didn't respond we would be behind the times." Weitz said his firm discloses to clients that it owns the financial services company and receives a commission on the insurance policies the agent sells.

In Miami, Morrison Brown Argiz & Co. just moved into bigger offices in the Brickell area and also has begun to establish alliances to sell financial services.

For a child-care operator, the savings was more than $150,000.

For North American Biologicals (NABI), payroll expenses were reduced by $4,300 one year and $10,000 the next.

For Signal Communications, the savings is expected to add up to $10,000 annually.

What's the secret?

"Ask," says Victor J. Ronder, whose Boca Raton firm Expense Reduction Consulting does just that every day for its clients.

"He's saved us in excess of $150,000 in long-distance phone service, food and office supplies, and payroll services," said Ira Malamut, senior fiscal officer for Redlands Christian Migrant Association. The nonprofit organization operates child-care centers for migrant farm workers in Delray Beach and 70 other locations around the state.

"It's a win-win situation because he only earns his fees if he saves the client money. We had nothing to lose and everything to gain," Malamut said.

The first 24 months' review is on a contingency basis: clients pay Ronder 50 percent of what he saves them.

Why can't a business do cost cutting for itself? It can, but in areas like telecommunications, "most of us don't have the expertise or the time to find what the best deals are," Malamut said.

Ronder honed his pricing skills as a purchaser for Texas Instruments, Giant Food Stores, The Wonder Market Cos. and Continental Farms. Four years ago he started his own firm, perusing clients' invoices and contracts for telephone and data, printing, utilities, payroll service, property tax assessments, overnight shipping and leases.

Often expenses can be reduced simply by re-negotiating with an existing supplier, he said. "My goal is to attempt to keep clients with current vendors, but negotiate a lower price."

That's preferable, Ronder said, because the client often has an otherwise satisfactory relationship with the supplier or service.

Some of Ronder's prime cost-cutting targets:

• Telecommunications. This hotly competitive area is open to negotiation. By consolidating voice and data lines and pursuing alternative local providers, a company's telecommunications' bill can be cut by about 30 percent, Ronder said.

• Payroll service and professional employer organizations.

"We were able to offer better benefits for less money to our employees, plus more." said Jonathan Franklin, founder and chief executive of Signal Communications in Fort Lauderdale, a distributor of Motorola products. Through Vincam, a Miami-based professional employer organization, his 48 employees now have better rates on health insurance as well as a 401(k) retirement plan and a credit union.

• Bob Hydes, payroll and benefits manager for North American Biologicals (NABI), a publicly held company in Boca Raton, said Ronder found some double charges and reduced payroll expenses by $4,300 the first year; in the second year, Ronder negotiated a discount with the vendor, saving $10,000, Hydes said. Printing. Ronder negotiates better pricing, checking on the necessity of each form and whether two-color might work just as well as four-color on a brochure or newsletter. "People spend an astronomical amount on forms," he said.

• Property tax assessments. Ronder works with a specialist to review a company's property assessment. One Hollywood bank's property tax was reduced by $10,000 after he argued the property was overvalued because there was an oversupply of bank properties on the market.

• Overnight shipping. Bulk shipping can be negotiated. And next-day delivery can be had at the two-day United Parcel Service rate in most parts of Florida, Ronder said. "It depends on where it's going and on the size of the package."

Ronder usually works with medium-size or large companies, but he said there are many ways a small business can cut expenses.

On long-distance rates, shop around to pay 12 cents a minute or less, Ronder advises. "Talk with your vendors. Tell them, 'we're looking to be lean and mean.' Ask the vendor, 'how can we reduce the cost for this?' "

Ronder said if you don't ask, you'll never know and you may be paying more than you have to.

April 23, 2004

DAVIE* The trash hauler providing the town with pickup services is fighting aggressively to keep its multimillion dollar contract.

On Wednesday, the day before bids were being opened on the contract, Waste Management officials issued the town a $250,000 check in hopes of resolving a claim the company shortchanged Davie $682,000 in unpaid fees.

Vice Mayor Judy Paul said the check was a "good faith" gesture and added: "I'm sure they will take care of it. ... I'm optimistic."

The dispute arose after council members hired an auditor last year to investigate whether Waste Management was paying enough franchise fees.

Tony Spadaccia, a Waste Management representative, said his company is cooperating with town officials.

"It's about to be resolved," Spadaccia said. "It's not an issue, and it should not be an issue."

The garbage contract, held by Waste Management for more than 28 years, generates more than $1 million in annual revenues for the town. It expires in October.

Currently, Republic Services of Fort Lauderdale is the only hauler competing for the job.

Bid proposals, however, show Waste Management is proposing lower costs for residential services than its competitor.

Under the company's bid, residential twice-a-week pickup -- which includes recycling, bulk pickup six times a year and a billing fee -- would cost about $15 a month when surcharges are added.

Under Republic's bid, pickup would cost $18.72.

Residential customers currently pay an average of $64.35 every three months, or $21.45 a month.

Republic, however, is proposing lower prices for commercial customers.

No officials from Republic Services were available for comment.

"We have to see how the numbers come out. It's very, very competitive," Spadaccia said.

Town officials in about three weeks will ask both companies to explain their proposals.

Council member Lisa Hubert said the financial dispute with Waste Management would not necessarily influence her vote because the company "is doing a great job."

Of the money discrepancy, she said, "It depends on who is doing the data entry. People are humans; they make mistakes."

Auditing your phone service, not switching carriers, can be the best way for small businesses to cut costs.

Jonathan Franklin, president and CEO of Fort Lauderdale's Signal Communications Service, has spent most of his career in the telecommunications industry, first at Motorola and, since 1991, building his wireless equipment distribution company. Running a fast-growing sales operation, though, left Franklin little time to focus on setting up the most efficient telecommunications system for his own company. "Things are changing so radically on local service and long-distance service," says Franklin. "We just can't focus on everything."

Enter Expense Reduction Consulting (ERC), a four-year-old Boca Raton consulting firm aimed at helping small businesses cut costs for a wide variety of products and services. In the telecommunications area, ERC reviews local and long-distance bills and analyzes the configuration of the telephone network. There may be blatant errors, such as charges for telephone lines no longer in use, or more subtle problems of inefficient bundling of telephone lines.

ERC, like similar telephone and expense audit companies, works on contingency, charging nothing up front but collecting 50% of any savings for two years. By analyzing Signal's long-distance, local set-up and fees for its three offices, in Fort Lauderdale, Miami and West Palm Beach, ERC saved the company a total of $700 a month. Long-distance costs are down $300, with the per-minute cost reduced to 9 cents from 11 cents, and Signal didn't have to switch from its service provider, Biztel. "My goal is to recommend staying with the same vendor," says ERC President Victor Ronder. "I try not to recommend switching."

For local telephone service, deregulated two years ago by the Florida Legislature, ERC did find a better deal for Signal with an alternative local provider. At the Fort Lauderdale office Ronder negotiated $400 in monthly savings with MCI, which is aggressively courting local business away from BellSouth. "I'm hoping BellSouth will reduce their pricing rather than me having to switch," says Signal President Franklin.

As president of a 50-employee company, Jonathan Franklin doesn't have much time to devote to negotiating long-distance contracts or investigating better payroll administration.

So when Franklin heard about Victor Ronder's company, Franklin decided to give the consultant a try. Ronder runs Expense Reduction Consulting, a four-year-old Boca Raton firm that helps businesses renegotiate phone contracts and buy cheaper supplies.

Ronder scrutinized Franklin's bills at Signal Communications, a Fort Lauderdale company that sells Motorola products to municipalities. He renegotiated Signal Communications' long-distance contract, and he worked out an employee-leasing program that cut costs and let Signal offer its workers better health insurance and retirement plans.

Signal Communications' savings: About $400 a month on long distance, and $8,000 a year from employee leasing.

Ronder keeps half the savings for two years. Franklin said Ronder's bill is worth it.

"We're a small business, and we're growing every day," Franklin said. "Our resources are taxed. We don't have time to look at long distance or employee leasing.

When Ronder launched his business in 1993, he was sure there were plenty of small business owners like Franklin who would welcome help in cutting costs.

Ronder's rationale is that all entrepreneurs want to cut costs. But many lack the time or expertise to renegotiate contracts or haggle over supplies.

"Most employees have their plates full," he said; "I'm certainly motivated to save my clients money."

When trolling for clients, he typically approaches a company's chief financial officer. His pitch: Clients pay only when they save money through Ronder's advice and negotiations.

Ronder's career has included stints as a purchaser for regional supermarket chains in Boston and Pennsylvania. His last position before striking out on his own was as telecom manager for Continental Farms in Miami.

Ronder wouldn't disclose annual revenue, but he said his billings have doubled each year of the company's existence.

In addition to Signal Communications, Ronder's client list includes NABI of Boca Raton, Ocean Bank of Miami and Bank Rate Monitor of North Palm Beach.

He's worked in industries he knows nothing about. For instance, Ronder said, he helped a veterinary clinic cut costs on drugs and supplies.

"I don't know anything about veterinary drugs and supplies," he said, "But purchasing is purchasing, and negotiating is negotiating".

Ronder also helped Redlands Christian Migrant Association, a nonprofit group, slash costs on groceries and supplies.

By consolidating the organization's bottled-water purchasing with Crystal Springs, for example, Ronder helped the group save $2,000 a month on bottled water alone. He also negotiated nonprofit discounts with the organization's food wholesaler.

"My No. 1 goal is to keep my clients with their current vendors, but at a better price," he said. "If you don't ask for a better deal, you'll never get it."

The way executives at NABI saw it, Victor Ronder had achieved the impossible.

Ronder, President of Expense Reduction Consulting (ERC) in Parkland had found a way for North American Biologicals (Nasdaq: NABI) to save money. He'd already saved the Boca Raton-based pharmaceutical firm $4,300 in payroll costs. Now he'd gotten the same vendor to cut prices again, reducing NABI's payroll expenses by more than $14,000 annually.

Ronder had negotiated on behalf of NABI with ADP, a payroll processing firm, and produced a $10,000 reduction on invoices.

NABI executive Bob Hydes said Ronder got concessions in pricing and worked on a contingency basis. "The result was a win-win situation for NABI."

Nothing New

Cost busting is not a new concept. Purchasing managers and agents have been controlling the price of doing business for years.

What's new is that layoffs and "right-sizing" have prompted many companies to dissolve their purchasing departments altogether, forcing CEOs and CFOs to delegate the responsibility of cost control to less experienced employees. Many start-ups don't have purchasing agents at all and those that do often have problems getting a handle on costs.

Yet a company's relationship with its vendors is one of the most critically important aspects of business today, according to a survey of CEOs by management consultant A.T. Kearny at Arizona State University.

"Purchasing departments are getting smaller," Ronder said. "At the same time they are becoming more important and have more responsibility."

And that's where companies such as Ronder's come in. There are several expense reduction companies operating in South Florida, though most are geared toward specific industries. Telcom Corp. of Boca Raton, which focuses on reducing expenses in the telecommunications sector, is just one example.

Checking Rates

According to Ronder, most companies are surprised to find how easy it is to trim costs.

"I've noticed that even high level people are pretty confused when reading their BellSouth or long distance bills," Ronder said. "And yet they negotiate a rate program that no one checks until I'm called in. I've been in situations where I've gone back to the carrier and found a client was put in the wrong program and got a credit for them."

Other areas where company's can cut costs are printing expenses, employee leasing, payroll services, shipping costs and property taxes. Companies just need to know where to look, Ronder said.

"We come back with a spreadsheet detailing our analysis," Ronder said. "The whole process can be done in a few days or it can take up to three months to negotiate a new long-distance contract."

Ronder said his company goes beyond just reducing expenses for companies.

It also attempts to educate clients so they don't have to come back. ERC also monitors checks and balances.

Ronder can show companies how to save a million dollars, but if the client isn't comfortable with his suggestions, there's no obligation and no fee involved. Typically, expense reduction consultants such as Ronder work on a 24-month contingency basis.

"We're an extra pair of eyes during the two-year period that can scrutinize invoices," Ronder said.

More to Come

The Center for Advanced Purchasing Studies (CAPS), a procurement industry research group, sees a boom on the horizon for consultants like Ronder because of fundamental changes in the way companies conduct business.

"What they [consultants] are trying to do is a growth industry because cost reduction planning is going on from top to bottom, from big firms to little firms," said Phillip L. Carter, CAPS' director in Arizona.

Carter said the larger expense reduction companies bring in an army of junior consultants, go through a company's records, figure out where they are spending money and show them where they can save. It's a manually intensive process.

"Most of their [consultants'] business is in the non-production and service sectors," Carter added. "Manufacturers typically work hard on their purchasing cycles."

Results of a recent study jointly conducted by National Association of Purchasing Management (NAPM), CAPS and Michigan State University implied that advances in technology, globalization and emerging market growth have changed the role of purchasers to one that will focus on supplier relationships and strategies.

For companies with no purchasing director, such as many of the small and mid-size companies Ronder names as clients, an expense reduction consultant becomes invaluable.

"My main goal is to keep my clients with their current suppliers, to obtain better pricing and better programs for them," Ronder said. "Sometimes I get involved in looking at the corporate process. If there's a better way of solving that (mousetrap), I attempt to show them that."

One problem companies seem to have in common is escalating communication expenses. Ronder said that even the smartest companies are often unaware of cost-saving programs at their disposal.

"Over the years we've been able to find programs and products out there that can benefit a company but aren't being promoted," Ronder said.

Ronder noted one program that helps reduce employers' medical premiums by 20 percent, and it has nothing to do with changing providers or self-insurance ­ it's strictly a tax issue. Another plan helps tool contractors increase the net pay of employees while reducing FICA and workman's compensation costs for the employer.

"These are situations that none of these people are aware of," Ronder said.

Boca Raton, FL - May 10, 1998 - The need to cut costs to stay competitive has never been more intense. Many small business owners want to find ways to save but just don't have the time, energy or man power to do it. Now help is on the way!

Basic cost cutting isn't enough anymore. Today, creative cost cutting is the order of the day - so just imagine what it's like for a non-profit organization that depends on limited public funding. That's why the Redlands Christian Migrant Association (or RCMA) decided to get help from the outside.

They hired Boca Raton based Expense Reduction Consulting to increase their bottom line.

"We target everything from general overhead type categories to raw materials, and we attempt to negotiate better pricing, better programs with a client's current vendors," explains Victor Ronder, President of Expense Reduction Consulting.

Based in Immokalee, RCMA which provides child care services to over 5,000 children and migrant workers around the state is now saving over $130,000 annually on everything from food to cleaning supplies to toys and office supplies.

ERC also caters to more mainstream businesses. ERC comes in, sees where your company spends its money and then 'negotiates away' with vendors. For the first two years ERC keeps half the savings. After that, the savings are all yours.

So where can companies see big savings? Ronder says that with long distance, most small business owners should be paying no more than 9 to 12 cents per minute.

"Never accept the first per minute rate that they offer you," says Ronder. "I would suggest going back once or twice and attempting to work them down." But that's not all. There are many basic items that you can save money on - like paper towels, napkins and even on your copy paper. Did you know that if you spend at least $1,000 a month in office supplies, you have a good chance of negotiating better prices with even large chains.

"If you don't ask, you'll never get a better price," says Ronder.

It's definitely paid off for RCMA "As a non-profit agency, every dollar we save we can use toward the care of children, and that's our mission," said Ira Malamut, Senior Fiscal Officer at RCMA.

Ronder says the whole process from preliminary research to final quotes takes about six to eight weeks.

Victor Ronder, president of Boca Raton based Expense Reduction Consulting Inc. (ERC), has a plan to put a lot of people to work from home offices.

And in the process he hopes to expand his business to a national, and eventually, an International level.

Ronder, a former purchasing agent for a major telecommunications company, operates his consulting business on a unique basis.

"I offer companies a no-lose proposition," he said. "l cut costs and save a company money or I don't get paid."

During the two-year period of the contract, he splits the savings with the company. After the end of the contract, the savings are theirs.

Time to grow

For the past five years he has operated on his own from his Boca Raton home office.

"But now the time has come to expand." he said.

"I plan to grow the business in two ways - through signing up a network of independent consultants and licensees, who will operate from their home offices just as I do.

"I will train and equip them and then they can serve as associates using the ERC name, materials and support."

Ronder said his licensing program will be much like franchising. A licensee pays an up-front fee and a 10 percent royalty on receipts. Is assigned a territory and can hire other consultants.

A consultant's participation is more limited, has no up-front fee and pays ERC a 30 percent royalty on receipts.

"It's a great opportunity for people to become home-based consultants and licensees." said Ronder. "They can walk into a ready-made business.

"I supply them with vendor databases, contract forms, spreadsheets and more. And I already have savings programs worked out with many national vendors."

The expansion to include more licensees and consultants under the ERC umbrella will enable his company to tackle bigger projects. Ronder said.

"Let's say that a large corporation such as IBM needs service. I can't handle that. But with a team of six or seven associates, we can," he explained. "My goal is to bring in associates with a wide variety of expertise such as in telecommunications, metals, health-care and so forth, and make them successful."

"I'm trying to develop a national organization of people working from their home offices. Then I want to take this program into South America too."

Ronder started ERC in 1993, finding a cost-cutting niche that, after the widespread downsizing of the workforce in the early 1990's, the remaining overburdened work force had little time to perform.

Looking for costs to cut

ERC reduces overhead by first examining a company's expenditures and then re-negotiating current vendor contracts to drive a harder bargain.

Some expense categories ERC targets for cost savings are telecommunications, raw materials, payroll services, energy conservation, property tax assessment appeals, tenant lease analysis, printing, shipping, office supplies and other regularly purchased goods and services.

While Ronder primarily works with businesses, he has also helped other organizations.

Recently, he was called to help the Redlands Christian Migrant Association, a non-profit Immokalee-based organization that provides child-care services to migrant and seasonal farm workers' families in 22 Florida counties.

After meeting with Ira Malamut, RCMA's senior fiscal officer, and conducting an audit, ERC recommended measures that saved the organization more than $150,000 on phone, food, bottled water, program supplies, office supplies and payroll services.

"He does things that a lot of businesses don't have the time or resources to do," Malamut said.

"Telephone rates can be very confusing. He had the experience to navigate us through everything and get us a great deal."

Now Ronder looks forward to expanding his reach by teaching others to do this type of work.

Victor Ronder, president of Expense Reduction Consulting in Boca Raton, used to be a purchasing agent for a major telecommunications company and felt he did not get paid enough for his expertise. So in 1993, Ronder began his own company doing what he does best: shopping for a good deal. Today, his former employer is one of his best clients.

"Now I get paid for looking at a company's purchasing habits with existing vendors and trying to get them a better price. If I don't save them anything, I don't get paid," says Ronder.

After consulting with clients for about a half-hour and observing their invoices and purchasing habits, Ronder writes up analysis of potential savings they might collect under his recommendations. His fee is 50 percent of a company's total savings on purchases if they go with his plan.

"When I meet with companies I ask them to have their expense reports or profit-and-loss statements handy," Ronder said. "Then I generally figure out a few areas where I have potential to make them money. It's all risk free. From there they can take it or leave it."

Ronder's specialties include everything from telecommunications to insurance. Ronder usually deals with accountants working for companies searching for ways to reduce overhead costs. One such client is Jeff Bolton, a partner at Daszkal, Bolton & Manela in Boca Raton.

"My clients are usually focusing on the day to day of business and don't have the time to question their purchasing standards," Bolton said. "Basically, ERC acts as an adjunct buying source for clients. Vic shakes things up a little by finding a competing vendor or shaping a better deal for them with existing vendors. Best of all, he's non-intrusive. If there's savings to be had, then it's a win-win situation. If not, the client walks away with some valuable information."

ERC never suggests cutting employees. Ronder believes his services and the money saved by his clients can sometimes be sufficient enough to save jobs in some cases.

"Instead, we show people how to cut other expenses, while always receiving the same or better quality goods and services at a reduced price."

Recently, Ronder was called to help the Redlands Christian Migrant Association, a non-profit organization which provides childcare services to migrant and seasonal farm workers' families in 22 counties statewide. After conducting an audit and meeting with RCMA Senior Fiscal Officer Ira Malamut, ERC has saved the organization more than $150,000 on long distance and cellular service, food, bottled water, program supplies, office supplies and payroll services.

"He does things that a lot of businesses do not have the time or resources to do", Malamut said. "Telephone rates can be very confusing. He had the experience to navigate us through everything and get us a great deal."

Beginning Tuesday, Floridians could pay more than a quarter to make calls from telephone booths.

The Public Service Commission issued a consumer alert Thursday noting the possible elimination of free directory assistance.

Telephone companies will be freed from state authority on governing such charges under a recent decision by the Federal Communications Commission, the PSC said in a statement.

"We do not have the authority to regulate rates anymore," said Julia Johnson, chair of the PSC.

In other parts of the country where pay phones have been deregulated, the charge has risen to an average of 35 cents for local calls. However, those prices vary depending upon the phone owner and location of the phone.

There are approximately 1,000 pay phone operators in Florida and more than 117,000 pay telephones. BellSouth, the largest pay telephone company in Florida operates 40,000 pay phones statewide.

No hangups

Victor Ronder, a Boca Raton telecommunications expert, said a possible l0-cent hike in rates probably would not change many peoples calling habits, but alternatives such as cell phones and calling cards might see a slight increase in usage.

"If there's more vendors, there will be much more competition which could actually keep the prices down," Ronder said. "It all depends on what the market will bear. As for a normal local call, I don't see a drastic change in calling habits."

December 1998 - Who doesn't like to save money? Coupon clippers and bargain hunters aren't the only ones trying to make every penny count; businesses large and small are always looking for ways to cut costs.

That's where Expense Reduction Consulting Inc. (ERC) comes in. The Boca Raton, Florida, business "assists companies in reducing overhead by helping them purchase more effectively," says Victor Ronder, the company's president. "We're capitalizing on the exploding trend of outsourcing."

As companies' purchasing departments get smaller, more and more businesses are turning to outsourcing for their purchasing needs.

ERC licensees help these businesses get the best deals from their suppliers. Licensees work on a contingency basis and receive 50 percent of the money they save their clients over a 24-month period.

ERC is seeking licensees nationwide with experience in purchasing and negotiating. There is a one-time fee of $8,000; the cost includes a two-day training session in Florida and a two-day, on site support visit at your location. Licensees pay an ongoing royalty fee of 10 percent of sales; part of that is used for national advertising.

For more details, call (954) 255-2511 or visit www.ercinc.com.

When making purchases, receiving a discount based on volume is not always the key to saving money, although some suppliers might lead buyers to believe that it is, according to Victor Ronder, president of Expense Reduction Consulting (ERC), a firm that helps companies to reduce overhead by advising them on how to purchase more effectively. For example, a 10 percent discount on pens would not provide as great a savings as a 10 percent discount on calculators, even if pens are the item a company buys in the largest quantity, because calculators cost more than pens. Buyers need to look at total dollars spent, not the number of items being purchased, said Ronder. When negotiating discounts with suppliers, make sure that the core list of discounted items is equal to 60 percent to 70 percent of dollar usage, advises Ronder.

Purchasing Pointers

Here, based on our conversation with Ronder, are some other points to keep in mind when making a purchase:

• Take the time needed to fully research and negotiate a deal with a supplier. Ronder noted that because they usually have a full plate, purchasing managers frequently don't have the time required to negotiate the best deal.

• Know the market and find the right supplier for the product being purchased. Ronder said that two of the biggest mistakes that companies make is buying without having a sufficient knowledge of the market for a product and choosing a supplier that doesn't fit the company's needs. He told us about one client that was making large volume purchases from a "Mom and Pop" supplier that although they offered good service, couldn't provide the discount that was warranted by the volume being purchased. Ronder switched the client to a supplier that is now providing a 40 percent discount, as well as comparable service.

• Ask for a better deal. Ronder said one mistake he finds that many small to mid-size companies make is not asking for a better deal. If a company doesn't ask, a supplier is not going to volunteer a better price, adds Ronder.

• Never accept the supplier's first offer. Or the second.

• Review items that are purchased on a regular basis to make sure that the prices negotiated are the prices being billed. If a company negotiated a price of $1 per item, it should make should make sure it's not being charged $1.05. In addition, prices should be reviewed to see if they warrant renegotiation.

Some specific areas where buyers can save money include:

• Telecommunications: The telecommunications industry is constantly changing, and companies that keep on top of these changes will be in a better position to negotiate deals that will save them money. Companies using fixed-rate telephone plans should periodically review their plans to see if the market rate has fallen below the fixed rate and, if it has, ask the phone company to adjust it accordingly. In addition, they should ask for a credit for the entire period in which their rate was above market.

• Software licensing: When purchasing a software program, determine which employees need to use the program and only purchase licenses for those employees. Every employee in a department of company may not need to be a licensed user for each program.

• Payroll services: Companies that employ a payroll service may be able to cut costs by reducing the number of reports that it receives from the service. One ERC client was receiving 52 reports a year from its payroll service, but upon review by ERC it was found that the company only needed to receive reports four times a year.

• Overnight mail: Ronder said that users may be able to save money on overnight mail but receive next-day service by sending deliveries via two-day mail. He explained that in his geographic area, UPS delivers two-day mail by the next day and recommends calling the local UPS service center to see when second-day mail usually is delivered.

About ERC

ERC, which was started in 1993, looks at a company's expense categories, makes recommendations on how the company can save money and then negotiates with suppliers on behalf of the company. Because ERC works on a contingency basis, clients, do not pay a fee unless results are produced, and then ERC receives 50 percent of a client's savings over a 24 month period, with savings documented and calculated quarterly. Although the process typically takes four weeks, ERC continues to work with a company throughout the two-year period, for example, by dealing with service problems or conducting additional negotiations. ERC's areas of expertise include office supplies, telecommunications and computers. ERC which is based in Parkland, Fla., can be contacted by calling 954-255-2511; Web site, http://www.ercinc.com.