As we enter the final stretch of summer, many of us think of enjoying a few days at the beach, spending time with family and friends on vacation, or soaking up some sun on an outdoor patio with a drink in hand. Understandably, I doubt many of you are thinking of revenue recovery. But now is the perfect time to do so!
Many in-house counsel and their business unit clients are starting to put together their 2018 budgets for their departments. Imagine if you could offer to the GC or a member of your C-suite some ideas on where extra revenue might be found for next year’s budget.
If you already have a revenue recovery program up and running, then you are ready to start identifying the areas that might be most likely to generate that revenue. And if you don’t have a program already — what are you waiting for?! — then this might be the extra incentive you need to get one started, in addition to all of the reasons set forth in my prior blog posts. You can show your colleagues the revenue opportunities that await if a program is started.
As a jumping off point, consider these ideas of potential sources of revenue recovery that you may want to pursue:
- IP licensing and infringements;
- Royalty payments;
- Insurance claims and subrogation;
- Class action settlement notices (filing claims for your company; given the volume of products or services some companies use, these could be quite substantial; at a minimum, someone should be reviewing these notices to decide if a claim is worthwhile);
- Operational disruption claims (e.g., utility interruptions; faulty equipment; deficient or damaged inputs in supply chains);
- Contracts (ensuring vendors, customers and suppliers are following terms and committing to purchases or sales at agreed upon volumes and rates); and
- M&A agreements and asset purchases (checking to see if all those negotiated reps and warranties are being followed).
Not all of these will be applicable to every business, and other areas not listed here may be much better options for your company to pursue. The point is to think of those areas in your business either where significant revenue is generated or significant expenditures are made. From there, you can examine each area to see if there may be some low-hanging fruit for recoveries now or if you can start a process to routinely check for revenue recovery opportunities in those areas, especially if there are recurring instances where revenue may be captured.
Remember also to consult with key colleagues and other stakeholders whom you identified when establishing your program to obtain their input on the best sources of revenue.
The ultimate objective is to ensure that the revenue recovery sources you are pursuing align well with the goals you set for the program when it was established.