{"id":17379,"date":"2023-07-27T16:07:14","date_gmt":"2023-07-27T14:07:14","guid":{"rendered":"https:\/\/comasystem.dk\/hidden-costs\/"},"modified":"2025-07-31T12:26:48","modified_gmt":"2025-07-31T10:26:48","slug":"hidden-costs","status":"publish","type":"post","link":"https:\/\/comasystem.dk\/en\/hidden-costs\/","title":{"rendered":"Hidden costs"},"content":{"rendered":"\t\t
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Hidden costs<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The costly consequences of poor contract management<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tPosted July 27, 2023\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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If you don\u2019t have a complete overview of your agreements and contracts, you lose transparency \u2013 therefore you risk overlooking costs if your contract management is not in control. An independent study by World Commerce & Contracting<\/a> shows that good contract management can improve your bottom line by up to 9%. Here\u2019s why and how to avoid the costly consequences.<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Hidden costs, what are they?<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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What we call hidden costs refer to those expenses that aren\u2019t always obvious or easy to identify \u2013 but still impact your organisation\u2019s finances and performance.<\/p>

An example could be that you have more mobile subscriptions than employees with company-paid mobile phones.<\/p>

These costs can have a significant impact on the company\u2019s cost level and are often overlooked as the cause is not immediately visible in either the big or small financial overview of costs.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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“Lack of visibility and analysis leads to new issues”<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Quick decisions can hide costs<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The focus on costs increases with management responsibility, but what if your employees don\u2019t have the same focus on a day-to-day basis? As a result, employees don\u2019t always have a clear understanding of the financial consequences of the choices they make on behalf of their employer.<\/p>

You\u2019ve cancelled the contract with your current cleaning service with immediate effect due to poor service \u2013 and you\u2019ve put your receptionist in charge of finding a new supplier.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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“Seller’s terms and conditions are a good<\/em>
hiding place for hidden costs”<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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There’s a risk that you don’t think long-term, but focus on the quick solution – we need to clean and empty the bins. There are many times when your company is faced with a problem that needs to be solved and it pays to look at the long-term consequences – so that a solution choice does not create unnecessary or hidden costs.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Which terms and conditions have you accepted?<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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When you trade with other companies, there are often longer binding periods than you are used to as a private individual and companies are not protected by the Danish Consumer Contracts Act – however, the Danish Sale of Goods Act applies to both private individuals and businesses within Denmark. For business-to-business purchases, the Danish Sale of Goods Act only becomes relevant if there is no contract between the parties.<\/p>

Here, the term contract also covers, for example, in the case of an online order where you have accepted the seller\u2019s terms and conditions by ticking the checkbox in the shopping basket.<\/p>

How often do you read the terms and conditions when making a purchase on behalf of the company? – The seller’s terms and conditions are a good hiding place for hidden costs. Here, the seller can make reservations for rising operating and production costs and there may be an annual indexation of the price.<\/p>

An example could be cloud-based solutions (Software As A Service), where you use a third party to either store or process data on your behalf – but when the collaboration ends, have you given up the right to receive your data or is it simply deleted by the vendor? – Remember: Read the fine print.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The costly consequences<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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We don’t have a simple formula to calculate the financial impact, but imagine you have a contract, your employees use it several times a day and it is the subject of informal conversations. Of course, it’s the coffee machine that you have a lease on, with ongoing supply of consumables (coffee beans, milk and cocoa powder) and ongoing service of the machine.<\/p>

The agreement runs for 12 months and is automatically extended by 12 months unless the agreement is terminated. To terminate the agreement, this must be done no later than 3 months before the expiration of the agreement.<\/p>

How do you make sure that you are aware when the coffee dispenser has brewed bad coffee, that your agreement is cancelled \u2013 no later than the last day of the ninth month of the agreement, so that it is not automatically extended for twelve months and so that your employees don\u2019t have to drink bad coffee for at least another year?<\/p>

And it\u2019s not limited to the coffee machine, it could be:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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