Boston Business Journal - RECAP cleans up messy vendor lists

RECAP, Inc. > News

Originally published in
Reprinted with permission

RECAP Cleans up Messy Vendor Lists after Mergers

by Julie Carrick Dalton
Journal Staff

When companies buy companies that buy companies, the multiple name changes and numerous vendor lists create a billing nightmare.

Enter RECAP Inc.

A financial management consulting group, Needham-based RECAP targets financial services companies, particularly those involved in mergers, and helps consolidate their accounts payable systems.

And the ongoing merger-and-acquisition frenzy has created and ideal climate for RECAP, the only Boston-area company focused on vendor management for the financial services industry.

Jon Casher, chairman and co-founder of RECAP, said his group has saved millions of dollars for companies that inadvertently were being double billed by vendors.

For example, one customer which was involved in several mergers had 200,000 vendors listed in the company’s billing system. IBM was repeated 1,500 times and AT&T had 2,000 entries.

"They kept buying companies and adding the new companies’ vendor lists to their list. They didn’t realize many of the vendors were already there," he said. "A lot of our clients don’t know who they’re doing business with."

When RECAP finished eliminating duplicate billings, the list of 200,000 shrunk to 30,000.

The privately held RECAP has grown by about 100 percent each of the last five years. As consolidation continues in the financial services industry, Casher expects to continue growing at the same rate.

Founded in 1989, RECAP, which didn’t release revenue numbers, works with nine of the 20 largest banks in the country, 12 of the top 50 diversified financial services organizations and three of the five largest mutual insurance companies.

"For banking and insurance companies, this is a huge problem," Casher said of vendor tracking.

Other firms across the country with the broader focus of accounts payable also focus on vendor management, said Scott Eston, a partner at Coopers & Lybrand LP.

Casher said his company is unusual because of the technology upon which it was built. RECAP grew out of a software program which runs company data and identifies inconsistencies or double billings.

"Other companies like ours dedicate five or six people to one client company. We can dedicate one employee to about three or four companies because we are so highly automated," Casher said.

Liz Geddes, head of accounts payable for New York-based Metropolitan Life Insurance Co., hired RECAP last year to help her company make its billing system more efficient.

"Before they helped us consolidate there was more than one way of doing things. Sometimes invoices did not have numbers and the methods for creating numbers were interpreted different ways," Geddes said.

After running the accounts payable records through the RECAP software, RECAP consultants helped MetLife create more efficient processes and avoid similar problems in the future.

"For us, it was a great benefit. They’ve developed software that would be too costly for us to get on our own," said Geddes, who would not disclose the total savings.

RECAP bills on a contingency basis. "If we don’t find them savings, we don’t get paid," Casher said.

With more companies such as Coopers getting into vendor management, Casher said RECAP’s competition is growing quickly. At the same time, more companies are seeking vendor management services