Analysis: 35% of college food invoices have overcharges

Over a third of the invoices received by colleges and universities from their foodservice distributors contain at least one overcharge according to an analysis by audit firm Buyers Edge. The company, which processes $3 billion in invoices from 350 distributors annually, looked at $6 million in individual invoices for college/university foodservice operations in 2015 and found that there was at least one overcharge on 35 percent of them.

Some were only a few pennies but others, especially if the error was not caught over an extended period, added up to a significant amount of money. The analysis found that typical overcharges amount to about 1.5% of the total dollar amount of each invoice but can often also be in excess of 10% when analyzing one subset of spend.

“I want to be clear that we do not believe these frequent overcharges are the result of tricks or bad intentions on the part of distributors,” said Buyers Edge President Steven Daren in a statement accompanying release of the analysis results. “The restaurant food purchasing process is an incredibly complex one and simple mistakes can and often do happen if they are not constantly being monitored."

Key reasons for invoice overcharges cited by Buyers Edge include contracts that are submitted after earlier-than-normal deadlines that some distributors have for cost plus pricing on products; data and code errors made when they are manually entered; the requirement to use their own distinct distinct contract form by some vendors; and miscommunication about who is to submit the contract or the foodservice manager simply forgetting to submit it.

Contact Mike Buzalka at [email protected]