Die, Billing Errors, Die: The Monster Finally Meets Its Match

By: Praful Saklani

It’s hardly a secret, but it’s certainly something that service providers are increasingly reluctant to talk about. Billing errors have long been the bane of the industry, surviving assaults from technologies ranging from business intelligence to revenue assurance systems. They have persisted despite the disastrous effect of over-billing on customer relationships and brand perception, as well as repeated rounds of penalties from state and federal governments. Over-charging is a serious revenue and reputational issue; underbilling is a profitability and margin issue. You’re dinged either way. But despite the high stakes and long battle, the errors still keep coming.

Communications and colocation services are hardly the only verticals plagued by this particularly damaging process failure. Among the large B2B enterprises I’ve worked with, I’ve found that between five and 30 percent of these companies are currently sending out invoices with at least one material error. The errors range in magnitude from four to 16 percent of the billed amount.

But few other industries show the same variability in commercial terms that’s typical in the world of networks. Service providers struggle to manage a dizzying array of price ramps and incentives. You might decide to offer discounts on your standard tariffs in a contract, but is anybody checking to make sure that you’re not still using the standard rate to calculate early termination charges? Or making sure that your discounts are no longer showing up in your billing after they’ve expired? With today’s extended, multi-tier product lines, maintaining rigor around even basic billing functions—such as ensuring you’re not charging customers for products they haven’t ordered—can be challenging.

In many companies, massive pricing and discounting complexity is matched by system complexity, often the result of a long history of mergers and acquisitions. Billing systems and the other elements of the Business Support Systems (BSS) stack, such as customer relationship management systems and order management tools, don’t always communicate well with each other—if at all. As a result, once an error takes hold, it’s hard to eradicate. It can hang on for months, years, or forever.

Can service providers look forward to a future that won’t include billing inaccuracies? My answer is an unqualified yes. A new approach that combines curated best practices and selective automation can finally eliminate the errors and seal the revenue leaks once and for all.

Four steps to billing accuracy

A systematic approach to solving the billing puzzle should follow these steps:

1. Construct a commercial relationship baseline. Improving billing accuracy starts with the fundamentals: ensuring that the customer is billed for the right product or service, at the right price, for the right locations and at the right time. But how do you know what is “right?” By constructing an accurate, comprehensive view of the current state of each commercial relationship. That means extracting and assembling information from all of the contractual documentation, such as master service agreements, orders, amendments, and statements of work, that define the relationship. Organize the data in order of precedence to determine the most current pricing and billing terms by product and site for each account. Ensure that the documentation covers all moves, adds, changes, and disconnects (MACDs), to guarantee that the most current view of all purchased products and services is available.


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