Almost two million counterfeit £1 coins were returned to the Royal Mint in the last financial year. This was more than 23 times higher than the number seized six years earlier. Its an epidemic which is costing UK businesses lost profits, and compromising faith in the nuts and bolts of our currency.

Growing number
In a written parliamentary answer, the Economic Secretary to the Treasury, Justine Greening, explained that high-speed automated systems were used by banks and the Post Office to process deposits and prepare coins for reissue.

“These automated systems are capable of detecting and withdrawing a significant number of counterfeit coins,” she said. “All counterfeit coins detected from coin processing are sent to the Royal Mint for disposal.”

Spotting fakes
As soon as an accepted coin is found to be counterfeit, it is immediately rendered worthless and attempting to pass it on is an offence.

One way to identify a fake is to check the alignment of the coin. By holding it so the Queen’s head is upright and facing you – when you spin it round, the pattern on the reverse should also be upright. Fakes can often be at an angle. The Royal Mint’s online design portfolio can also be used to easily identify what is genuine and what is not.

Since they were introduced in 1983, the design on the reverse of £1 coins has changed every year.

The Royal Mint inspects a random sample of coins from across the country to establish the twice-yearly official forgery rate.

Clearly this is another potential cost saving area for businesses and staff are very much on the front-line. It is becoming harder to spot fakes but here are some pointers we in Expense Reduction Analysts’ Banking Team have come across:-

How to spot a fake £1 coin

• Indistinct lettering or wrong typeface on edge
• Queen’s head and pattern on reverse should both be upright when coin is turned over
• Design on reverse should correspond with official design for year of its issue

The process was open for the first few weeks to public sector workers alone. An amazing 63,000 people took part and we are working our way through their ideas.

It is now open to everyone to take part, so be as radical, creative and imaginative as you can

We will consider as many ideas as possible and the best ones will be considered as part of the Spending Review. The conclusions of the Spending Review, which will set out four year spending plans for all government departments as well as considering other areas of spending including welfare, will be published on 20 October.’

This is the simple message on the Spending Challenge website and this is the response from Expense Reduction Analysts.

Expense Reductions Analysts, Centre for Cost Management responds to the challenge of efficiency in the public sector by producing ‘Beating the Budget’- A guide for public sector organisations.

A few things that are included in this new guide are:

6 ways to best practice procurement

1. Create a ‘spend aware’ culture.
2. Utilise spend analysis.
3. Identify quick savings first.
4. Benchmark your spend against other organisations.
5. Take more strategic approach to procurement.
6. Don’t fall into ‘contract let and forget’ mentality.

5 steps to enhance efficiencies in the health service without compromising patient service:

1. Look at local  procurement options don’t just use the central route
2. Get clinicians to engage locally about the award of national contracts
3. Review service design
4. Avoid a silo budget mentality
5. Don’t reinvent the wheel

Expense Reduction Analysts has produced five Cost Reduction Guides that might offer some answers to this new Spending Challenge.

I was impressed with many of the pointers in Visa Europe’s, first whitepaper aimed squarely at helping the hospitality industry safeguard customer data http://www2.visaeurope.com/documents/ais/hotelbreach_europe_2.pdf . Under the title ‘Hospitality Breaches on the Rise’ it also offers insight on how cyber-criminals target hotels, as well as the  guidance I already alluded to on how data can be protected to help businesses comply with the Payment Card Industry Data Security Standard (PCI DSS).

Hotels often have more complex payment systems than other retail businesses, making it harder for them to achieve PCI DSS compliance. Compared with some retailers who might have only one point-of-sale, customer card data is often captured, stored and retrieved at multiple pay terminals within hotels – such as the reservation desk, restaurant, bar, or for room service, internet access and online bookings.

Cutting to the chase, the tips that impressed me are:-

• Change vendor-supplied defaults for passwords or other security information for Hotel Management Systems (HMS) and Point of Sale (POS) payment systems. The HMS is the central and core component in which cardholder data is stored, processed and transmitted to perform authorisation and settlement across other payment terminals in the network

• NULL sessions (unauthenticated connections to a Windows computer) should be disabled. This is the number one method for hackers to gain information on passwords, groups, services and users

• Install and maintain a firewall to protect data. HMS and POS payment systems should not be directly accessible via the Internet; inbound traffic should be blocked and outbound services should be filtered

• Assign a unique ID to each person with computer access and implement a dual-factor authentication method for remote system access via the Internet. This will mitigate unauthorised access into HMS and POS payment systems

• Track and monitor all access to network resources and cardholder data to track and monitor anomalies and suspicious attack activity

Cardholder data held by hotels is a potentially lucrative source of information for fraudsters who obviously view the hospitality sector as an easy target. By understanding the nature of security threats and the preventive measures that can be taken, managers in the industry can reduce the risk of compromise. The losses from fraud can be significant both in terms of bottom line cost and negative reputation.

Actually implementing the above measures may require specific expertise in some instances, but many are simple management practices. In Expense Reduction Analysts we certainly encourage all our clients to introduce (or maybe just re-invigorate) such practices as easy ways to protect profit, reduce losses and preserve reputations.

“Apart from the financial rewards of reducing expenditure, our work with Neill Summerfield and his team in securing service level agreements and key performance indicators from suppliers has encouraged people within the Academy to be more focused on working pro-actively to ensure that we receive the best possible service from our supplier base”

Importantly the decision to engage Neill Summerfield and his team of cost management consultants was supported by the Executive Management Board and the Board of Trustees. Progress in finding sustainable extra profits for the RAD is reported to both teams on a monthly basis.

Whilst much of the current growth is down to Barclays’ decision to issue contactless cards as standard for all UK customers, the other UK banks are likely to be more aggressive shortly.  We in Expense Reduction Analysts’ Banking Team expect to see most of the major High St Bank’s card acquiring arms working with retailers to encourage wider adoption.

Visa believes the recent rise in the contactless transaction limit from £10 to £15 is helping to make the cards a more attractive proposition for users and retailers.

Currently around 26,000 outlets are enabled for contactless and average transaction values are around the £4.30 mark, with evidence emerging of a surge in use among cardholders. Mark Austin, head of contactless at Visa Europe, said that in the last six months they had seen an increase of 100% in transaction volumes. So a groundswell of acceptance of the technology is growing. I will blog around that issue when I have more information.

For many of our clients its not around being an early adapter but more around recognising how customers, and potential customers, wish to carry out low value/high volume purchases. Moreover, maintaining the profitability of transactions is absolutely crucial. For my part that means ensuring that the actual real transaction costs are understood, rationalised and – where uncompetitive, challenged.

Everything Everywhere Limited was officially integrated on the 1^st July 2010 and is the merger of T-Mobile UK and Orange UK.

As one company, it has over 30 million customers, 16,000 employees and 700 stores nationwide. Over the next three years, Everything Everywhere plans to offer innovative and cohesive communications services that enable customers to do business more effectively, improving their productivity by up to 15%. It is offering a commitment to fostering new ways of working through partnerships, unrivalled communications services that enable new ways of working and the might of the R&D of the company’s parents, France Telecom and Deutsche Telekom.

Time will tell whether this merger will bring innovation to the UK mobile market or reduced competition with one dominant player. However with such a large number of stores in similar high street locations, some rationalisation would seem inevitable.

A 15% productivity gain is a very ambitious target but not one that is easy to measure or to demonstrate. A 15% reduction in prices would be a welcome boost to customers profit margins, but that does not seem likely!

As for the new company name, at least it is better than Orange-T and perhaps Deutsche-France would not have worked too well in the UK marketplace.

-      The maximum roaming call rate has been cut to £0.34/minute (10% reduction)

-      The maximum roaming rate (receiving calls) has been cut to £0.13/minute (20% reduction)

-      Data roaming charges have been capped at about £42 a month (unless a higher limit has been previously agreed)

However it is not all good news; some non-EU rates have increased, For example T-Mobile has increased its call rates from some popular holiday locations from £1.50 to £2.50/minute!

Horror stories abound of data roaming charges when travelling outside of the EU as many people just don’t realise that this is chargeable and very expensive. For example, posting ten 1MB photos onto Facebook from the World Cup in South Africa could cost in excess of £80.

The safe option is to turn off data roaming and instead connect to a local WiFi network which is free in a lot of hotels and cafes. Instead of calling, send texts; even outside of the EU these rarely cost more than £0.25 to send and are always free to receive.

Price inflation in some of the key operating costs for Logistics service providers is manifesting in price increases to customers.  Coupled with this, providers are becoming more inclined to push for these increases in some markets because the recession has taken a lot of capacity out of provision, and the continuing lack of readily available investment capital is constraining any growth in physical provision.

For example, there have been numerous reports in recent weeks heralding the return of pre-crisis, global trading activity. Indeed, two key airports, Hong Kong and Frankfurt, have reported record monthly Air Cargo volumes in May with year on year growth at around the 40% mark. It is also anticipated that Ocean Container import volumes into the USA for 2010 will match 2008 levels. While this news is encouraging for the global economy and, in particular, Asian markets, where confidence is growing, there still remains uncertainty around economic prospects in the European and US markets. For cargo shippers this means that it is as important as ever to review transport expenditure. Focus on improving service and rates while some capacity is still available makes great sense. Action now will also make dealing with the impact of potential capacity constraints in the future that much easier to manage.

Within the UK, anecdotal evidence from what we would regard as upper tier (in terms of service capability) providers indicates that they have been busier in the first half of 2010 than has been the case for many years. Similarly, although new LGV registrations have still not recovered, trailer manufacturers are reporting significantly fuller order books, and some are investing in additional manufacturing capacity. Ironically, although one trailer manufacturer is currently reporting that their UK facility is under threat because of overall reduced demand across Europe, the UK plant’s domestic order book is now significantly higher than this time last year.

Undoubtedly, the web has caused a major change in distribution patterns. The knock-on effect is that both client companies and logistics providers are having to learn to adapt at a faster rate than ever, and some are more successful in this than others. Consequently, although pricing from incumbent suppliers may be competitive for your business profile 12 months ago, that may no longer be the case. Not only are providers having to change, but purchaser’s staff need to build new levels of market knowledge as to who is providing what, and who can meet their needs competitively going forward.

The one sector of the Logistics business where we are seeing increased capacity availability within the UK is Warehousing. Our Logistics Team held their quarterly meeting in the North Midlands last week, and remarked on the availability of vacant properties on what has been regarded as one of the prime distribution estates for several years.  Despite the best efforts of property agents, travelling around the country, we cannot fail to see the proliferation of properties to let.  Even in those areas of previously insatiable demand in the golden triangle, properties lie vacant.  The availability of warehousing property is in our view a reflection of the overall depressed demand for storage and handling facilities. Our dealings with full-service providers also shows that many are finding they have more free space on offer.

Stock costs money both in terms of cash flow and storage costs.  The better organisations are actively managing stock levels and, as a minimum, ensuring that they mirror any downturn in sales, aided by sophisticated I.T. packages that allow total visibility of stock and demand throughout the supply chain.

The implications of this are that, for those looking to acquire property or already in situ, rents should remain competitive to attract and retain tenants. Shorter term lease commitments and attractive rental rates are available with the opportunity for further negotiation.

For those who have contracted out their warehousing and storage activity, or looking to change distribution networks, or even flex capacity to reflect growth demands without capital commitment, storage and handling rates remain competitive.  However the main message for these companies is that they should ensure that any storage arrangement is flexible with no long term commitments that may not match the future needs of their business.

At Expense Reduction Analysts we are frequently asked to review the waste and medical supplies costs associated with Nursing and Care Homes.

In many instances we find the staff and management are under pressure to deliver the best possible service to the people for whom they care, whilst operating under increasing levels of scrutiny and legislation.

We have therefore put together our top 10 tips for each area to help you drive down costs and improve your bottom line profit.