DEC user saves over $900,000 plus finds overpayment

Overpayment of $1.87MM due to poor vendor support and user record keeping

As we reported a number of issues ago DEC is in search of more revenue. The company does not seem to care that it is going after good customers. Recently a software re-audit of a large customer resulted in DEC demanding payment for over $900,000.

DEC had audited this same customer less than two years ago. At that time DEC demanded payment of over $1MM for software that the customer had installed on their computers. A settlement of a lesser amount was paid and the user and DEC agreed to stay on top of software usage so this problem would not occur again. Well it did, and the customer was not very pleased.

• During the course of our investigation we classified the demands of the vendor with the exposure of the customer. The classifications were:
• The vendor said the customer had the software but the customer did not have or use it (20%).
• The vendor had sold the customer software the customer did not really need (30%).
• The vendor said the customer had not paid for software but the customer had records that showed payment (30%).
• The vendor had installed the software on a larger (more costly) computer than was required to run (15%).
• The customer had the software and had not paid

We saved our client over $900,000 by using our audit reconciliation process. In addition, we implemented a software management process to minimize the possibility this would occur again.

After all was said and done, we calculated that DEC was owed nothing. As a matter of fact, the customer had overpaid DEC by $1.87MM. They had not verified the audit by an independent third party. There are some definite lessons that were learned by both the customer and the software vendor:

• Good record keeping is essential;
• Do not agree with anyone's numbers or data unless you have had them reviewed by a independent party; and,
• Do not install software in a "helter skelter" manner.