Manufacturers face margin pressure from rising input costs, complex supply chains, and multistate tax exposure. Recovering previously paid cash, stopping ongoing leakage, and optimizing recurring spend are among the fastest, least disruptive ways to improve EBITDA (earnings before interest, taxes, depreciation, and amortization). This guide outlines the most effective recovery and cost-optimization opportunities in manufacturing, explains common sources of cash leakage, and details solutions and expected deliverables.
Telecommunications cost recovery
Why cash leaks
Plant connectivity, OT/IT networks, and mobility often expand more quickly than contract oversight.
Common issues include incorrect rates, outdated tariffs, double billing after carrier migrations, services not disconnected, and unused device lines.
How to fix
Inventory all circuits, lines, devices, and features across carriers, and map each to specific plants, machines, and users.
Audit invoices against contracts and MACD (moves, adds, changes, disconnects) logs, and dispute incorrect rates and duplicate charges.
Adjust data plans as needed, decommission unused services, and consolidate vendors when cost-effective.
Establish a telecom expense management (TEM) process that includes monthly variance checks, contract and rate benchmarking, and approval workflows for new services.
Deliverables
A targeted opportunities report quantifying savings, recoveries, and recommended process improvements.
An implementation plan for selected recommendations.
Accounts payable (A/P) recovery audits
Why cash leaks
High transaction volumes for raw materials, components, capital expenditures, and contractors can lead to duplicate payments, pricing errors, incorrect vendor payments, missed early payment discounts or rebates, and unapplied credits.
Root causes include fragmented vendor master data, manual entry, weak three-way matching, and limited statement reconciliations.
How to fix
Conduct a three-year disbursement and vendor statement recovery audit to identify overpayments and recover credits.
Strengthen controls by enforcing purchase order, receipt, and invoice three-way matching, implementing duplicate payment controls, centralizing vendor master governance, and requiring credit memo application before new payments.
Add supplier statement reconciliations for key vendors and automate exception reporting.
Deliverables
Refund checks from vendors, vendor debit memos for future offsets, and credit memos to apply.
Stops or voids of pending erroneous payments.
Regular status updates and summaries of findings by issue type.
Retirement plan fee and expense reviews
Why cash leaks
Out-of-market recordkeeping and investment fees, along with revenue-sharing arrangements, do not offset costs.
Plan designs may result in overspending without aligning to talent goals, and operational inefficiencies increase overhead.
How to fix
Benchmark all fees, including recordkeeper, advisor, administrative, and investment fees, and eliminate higher-cost share classes where appropriate.
Review plan design, such as safe harbor provisions, profit-sharing allocations, and automatic features, to better target key talent and reduce leakage.
Document fiduciary processes, address operational variances such as loan and withdrawal processing or payroll remittance timing, and conduct competitive RFPs when appropriate.
Deliverables
A documented analysis of plan design, operations, and fee benchmarking.
Recommendations to reduce fees and align benefits with talent objectives.
Sales and use tax reverse audits
Why cash leaks
Frequent MRO purchases, machinery, tooling, and exemption-eligible inputs can result in overpaid sales and use tax, as well as misapplied tax by vendors.
How to fix
Conduct a reverse audit of invoices to identify exemptions by state and category, and prepare and file refund claims.
To prevent recurrence, build a taxability matrix by item and state, maintain exemption certificates, configure ERP and tax engines correctly, and train procurement and accounts payable staff on exemption rules.
Deliverables
Prepared and filed refund claims with supporting documentation. documentation
A list of identified exemptions and guidance to minimize future errors.
State and local tax (SALT) refund studies and incentives
Why cash leaks
Multi-state operations and evolving business activities can result in misstated apportionment, increasing effective tax rates.
Missed opportunities for credits related to facility expansions, hiring, training, and capital expenditures.
How to fix
Review entity structure, filing elections, nexus, and apportionment methods. Correct sourcing and pursue refund opportunities.
Identify and apply for incentives related to investment, jobs, training, and energy, and establish a process to capture benefits for future projects.
Create a compliance calendar and assign responsibility for renewals and filings.
Deliverables
Recommendation regarding entity structure, elections, and apportionment.
Prepared applications for eligible credits, rebates, and refunds.
R&D tax credit studies
Why cash leaks
Product, process, and software improvements often qualify, including on-the-floor process engineering and automation, but many manufacturers lack sufficient documentation and underclaim credits.
How to fix
Map projects and tasks to qualifying activities and costs, and systematically capture labor, supplies, and contract research expenses.
Quantify current-year credits, amend prior years as appropriate, and implement a repeatable documentation process using time tracking, project charters, and engineering notes.
Deliverables
A documented credit study quantifying benefits for current and prior years.
Support for amending returns to obtain cash refunds and a framework to capture credits in the future.
The bottom line
The right advisory team can partner with your staff to identify and implement cost recovery and optimization programs that quickly return cash, reduce ongoing expenses, and strengthen internal controls. Deliverables are tangible, including refund checks, credits, recoveries, management reports, and implementation roadmaps, enabling you to validate impact and sustain savings year after year.
The CBIZ advisory team provides comprehensive support from discovery through implementation and ongoing monitoring.
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