American Industries Can Rely on Cost Recovery to Recover Billions Lost Annually Due to Profit Leakage

CPRS Seeks to Mitigate Lost Revenue Due to Profit Leakage

BELLEVUE, WA / ACCESSWIRE / October 2, 2023 / New findings from CPRS reveal a staggering amount of potential revenue is lost annually across various U.S. industries due to profit leakage. This unrecognized or unintentional loss not only impacts major industry players but the global economy at large. Cost recovery, also known as profit recovery, is the solution.

CPRS, a Washington-based accounting firm that specializes in profit loss recovery and tax and contract compliance, estimates that companies lose one to five percent of EBITA (earnings before interest, taxes, and amortization) due to the inadequate management of contracts and payment follow-up processes. They also report that an estimated 42 percent of companies are currently experiencing some form of revenue leakage.

"Take the oil industry, for example," says Jamie Gordon, Communications Director for CPRS. "The industry produces 12.4 million barrels of crude per day in 2023, and is on track to produce 12.8 million barrels of crude a day in 2024. It's a $6 trillion industry. A 42 percent loss of revenue amounts to a potential loss of $2.52 trillion dollars."

Where it hits industries like oil and gas, chemicals, manufacturing, production and development, mining, distribution, and pharmaceuticals the hardest is in lost profits. For example, oil companies make money in three specific places - upstream, which is the exploratory stage, midstream, which is when crude or gas moves to market, and downstream, where crude is refined into gas or diesel fuel. The number of contracts involved in these three revenue streams is almost uncountable, and includes terminal companies, sublet fleets, facilities operations, regulators, and many others. The proper management of contract-related deliverables and billing for services rendered is essential to an oil company's fiscal health.

Companies that plug their profit leaks do so by streamlining processes and creating an ecosystem driven by revenue management. Automation and AI can help companies identify and address loopholes. But there is not a one-size-fits-all solution to stop profit leakage. Rather, there are a variety of potential solutions, all dependent upon the cause itself.

Companies that integrate contract data into robust, automated systems reduce leakage by improving accuracy and efficiency. Companies like CPRS can integrate contract data across the lifecycle of the agreement and align all divisions' data into a single billing, compliance, and reporting source. More importantly, an enterprise partner such as CPRS can not only identify the source of leaks, but recover lost revenue.

"We act as a single partner for duplicate payment, statement, contract compliance, indirect tax, and other payment review services," said Gordon. "Unlike our competitors, we centralize various payment recovery and prevention initiatives which eliminates our clients need to use several different firms who are sourced by different business groups within a given organization."

With billions of dollars on the table, there has never been a better time for major U.S. industries to reinforce their revenue streams and recover lost revenue than today.

To learn more, visit www.cprs-inc.com or contact Jamie Gordon at 425-209-3033.

Contact Information

Jamie Gordon
Communications Director
[email protected]
425.209.3033

SOURCE: CPRS