9 Steps For Auditing Your R&R Bills
For dealers that already use or consider switching to the R&R ERA Ignite Dealership Management System (DMS), here are 9 steps for auditing your R&R bills. This article will also help to understand the company’s general policies on price increases. It will not cover the terms for the UCS/R&R Power DMS, because they are typically handled differently.
Why February R&R Invoices?
R&R rolls out its price escalator to the dealer body every year in February. Hence, look out for the increases on your R&R bills around that time. If you are still negotiating your agreement in February, please clarify with your R&R representatives what impact the price hike will have on your proposal or just-signed contract even though it may have not officially started yet.
In other words, for how long does R&R guarantee the final negotiated price? Also, the price increase will not only affect new/renewal contracts but add-on agreements during the contract term too. The same printer or ERA Ignite user license acquired in January, is now more expensive after February.
1. Run Your February R&R Bills against January
Take the itemized R&R bills. Compare the individual price per item to the previous month’s fee for the respective service. You can use your January R&R invoice as a baseline. Keep an eye on quantity increases or decreases between the months. Remove those quantity differences when comparing the per-item pricing. For example, you want to break down how much each ERA Ignite seat had cost before February, and how much it is now.
Be careful with ERA Ignite seats you procured at different times. The original price at the renewal contract signing is likely lower than the price for ERA Ignite seats added at a later time. However, both original and add-on ERA Ignite seats should have gone up by the same percentage rate.
Also, review the price increases for any usage or form fees on your R&R bills. For example, some dealers are running the R&R Name File Service or NFS for data cleansing. There is a monthly minimum billing amount. Additionally, there is a per name-file fee beyond the minimum fee if the aggregated number of name files exceeds the minimum barrier. These are only cents per name file, but make a big difference when cumulated.
2. Determine the R&R February Increase
Calculate the increase percentage rate per item. Compare it to the negotiated price increase rate that is defined in your R&R “Exhibit”. You may have to search for it, but can usually be found under “Recurring Fees”. If you cannot find anything on your signed exhibit, then you can assume your contract is subject to the regular increase rate. The latter is typically defined in the R&R Consumer Guide.
Per today, the standard R&R price increase rate is the change in the Consumer Price Index for urban areas (CPI-U) plus an additional 2%.
3. Research the Official Inflation Rate
Look up the then-current CPI-U in February on the website of the Department of Labor – Bureau of Statistics: https://www.bls.gov/
This will give you an important benchmark when reviewing the per-item increase percentage rates. If the official CPI is 1.5% and your contract is subject to the standard R&R price increases, then your average price increase in February should not be higher than 1.5% + 2% = 3.5%.
4. Go Back To Your R&R Contract Start
Ideally, you also compare the itemized pricing from the new February R&R bill to the original price at the beginning of the term. The comparison will give you a better perspective on your Total Costs of Ownership over the term. This may become relevant in your renewal negotiations.
However, the exhibit that you had signed originally does not itemize the price per product or service. It is only the total upfront and total monthlies that are disclosed on the signed contract. Please request the per-item breakdown on your original agreement for reconciliation with your bills from your local representative.
5. Compare Price Increases Per Product Categories
Compare the increase rates per product and per category. In other words, look at the rate increases between products. For instance, did the monthlies for all ERA Ignite seats increase by the same percentage rate? Also, compare the rate increases between the categories. For example, are the average monthly percentage increases for ERA Ignite seats similar to the increases for equipment maintenance or OEM interfaces? Mark big differences between products and categories on your R&R bill. It is not unusual to experience significant variations between product categories.
6. Invite Your R&R Rep
Invite your R&R Software Specialist or R&R sales rep onsite. Please review the analysis of your R&R bills with them. Furthermore, request an updated utilization review. You want to identify items that may require additional training (ideally free) or need to be swapped out.
7. Replace Old Gear/License
If you are experiencing out-of-the-norm, but sanctioned increases in specific product areas, please discuss ways with your R&R rep on how to go back to the original price level.
For example, R&R may have increased the maintenance fees on older printers or document scanners beyond the stipulated price increase rate from the agreement. These items are now discontinued and thereby NOT protected by any price increase cap. Check with your R&R rep what would happen to the monthlies if you replace the old equipment with new gear. Would the monthly saving make up for the additional upfronts to buy newer gear?
8. Inspect Non-R&R Bills
Many R&R dealers have additional agreements with R&R affiliated companies. Other R&R entities could include NakedLime for marketing tools and equity mining or CoinData for DocuPad. Don’t forget about ReverseRisk for advanced reporting, Add-on Auto for accessory sales, or even KeyVault or KeyTrak for key systems.
These agreements are separate from your R&R exhibit. Unlike R&R’s price increases in February, the price jumps for the other contracts usually happen at the contract anniversary. Therefore they may happen at a different time and at a different rate. To review the price increase, you can apply the same principals.
9. Request R&R Credit If Due
If you found deviations between the executed increase rates on your latest R&R invoices and the negotiated rate increases from your agreement, please request feedback and credits from R&R immediately.
