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Vendor Service Charges Marcia Tuttle 10 Apr 1992 17:09 UTC

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Date:         Fri, 10 Apr 92 09:21:30 CDT
From:         October Ivins <NOTORI@LSUVM>
Subject:      Vendor Service Charges

Aqueduct Action Agenda item 13 "Analyze subscription invoices carefully
and verify the accuracy of vendor service charges." suggests that
serials managers not accept stated service charges on an invoice but
do their own analysis.  That is, DO THE MATH YOURSELF TO SEE IF THE
have found discrepancies of the following types: 1) Only the "big" renewal
invoice is at the stated charge, but all additional billings are at a much
higher rate. 2) Despite the presence of many "no service charge titles"
(those for which publishers give vendors a discount on the condition
that some of the discount is passed along to customers by prohibiting
a service charge) on an invoice, the stated service charge is found
to have been calculated for the *entire cost of the invoice*, not just
for the eligible titles.  (In one case, the stated charge of 4.2%
was calculated to be 14.5% for eligible titles).  3) Apparent "math
errors" when the stated service charge was lower than the actual calcu-
lated charge.
   Another aspect of this is not just examining invoices for the accuracy
of service charges, but being alert for service charge adjustments.  Again,
many in the group had experienced "service charge erosion" in which the
original negotiated service charge was adjusted each year (to a higher
rate.)  Changes in account composition might warrant such adjustment,
but serials managers should monitor rates and ask for an explanation
when rate changes seem unwarranted.
   Please keep in mind that there are other related points in the Agenda.
No. 14 addresses the concern that vendors charge different prices for the
same titles in some cases.  Keep in mind that a moderate service charge
on an inflated price may cost more in total than a larger charge on a
smaller price.
   Many thanks for your excellent question and giving us a chance to
expand on the necessarily concise Agenda!