The Environment
Telecommunications bills are growing increasingly more complex on a detailed level—they can average more than 100 pages, chock full of indecipherable line items. In the last 20 years, enterprises have worked hard to centralize the accounting, management, and buying power of their largely decentralized services. Telcos, however, have struggled to match this simplicity in their complex maze of monthly statements.
The complexity is largely a function of the tangled web of carrier billing systems. It is common for a large Telco to rely on 10 to 15 unique billing systems and databases. Separate call centers are often staffed just to handle customer account inquiries.
Inventory is a perpetual moving target and rate table updates are often neglected. With the carrier back office a mess, one is not surprised that telco’s miss bill so often. Few enterprises have an easy, comprehensive way to determine exactly what they are spending on telecom services, with whom, and how.
More than 50% of large enterprises don’t accurately know how much they spend on telecom related services across the company.
The average Fortune 500 Company receives 1,200 telecom invoices per month and the average mid-market U.S. enterprise receives more than 300 telecom-related bills per month. Enterprises, particularly those with many satellite offices, are inundated with separate bills for every location. Moreover, with new telecom services such as wireless devices becoming available, the enterprise is receiving still more monthly statements.
Telephone, long distance, data, and maintenance invoices have a long history of being incomprehensible to all but the trained professional. Billing has its own language, rationale, underlying tariffs and other regulations and every company has a different format, sometimes several formats, of its own.
Telecommunications invoices have their own set of clues as to the legitimacy of charges or other problems that may be present in an invoice. To find them, each invoice must be reviewed, in detail, every month. Once begun, a billing problem can snowball to higher and higher levels of expense. Obtaining a correction and adjustment is usually time-consuming, difficult, and ultimately frustrating. There is little wonder that so few companies do it or do it well.
The Challenge
PRS has found the failure to manage telecommunications invoices and contracts to be one of the greatest causes of excessive enterprise expense. How can you avoid these pitfalls?
- If a problem exists for a sufficiently long period of time, over billings become unrecoverable. This may be as little as ninety days!
- Charges often appear on local telephone company accounts that result in thousands or tens of thousands of dollars of excess expense for a single location and hundreds of thousands of dollars a year for an enterprise.
- Contract compliance must be monitored to determine that the obligations of both the vendor and the customer are met. Failing to audit for compliance may result in excess charges, substantial contract penalties, or the inability to take advantage of reduced rates.
The Solution
PRS has a unique approach that includes proprietary processes and technology to manage telecommunications invoices and reduce and control costs. Some of the elements of our service include:
- Receipt of all invoices
- Continual assessment of contract compliance
- Establishment and maintenance of a services and cost database
- Invoice review and validation
- Deducting and contesting improper charges
- Transmittal to Accounts Payable of remittance advice with General Ledger cost allocation codes
- Monthly and annual reports on costs, issues, and savings
- Document current procedures to insure that telecom invoices accurately reflect the approved inventory of telecom assets. Make recommendations to ensure that:
- Invalid or unauthorized charges are credited and removed.
- Telecom charges for all types of services are validated against contracted rates.
- MACD activities initiated by the provisioning group are accurately reflected on the telecom invoices.
- Exception reports to highlight anomalies in use of telecom assets.
- Invoice hierarchies comply with established standards requested by the provisioning group.
The Benefits
Outsourcing frees a company up to focus on core competencies; it can help them leverage economies of scale; and it exposes companies to the best in expertise, technology, and methodology. The promise of outsourcing is ultimately better service for less cost. Third-party services are often in far better positions to manage telecom costs more effectively. The reason: they have mission-critical access to rate tables, tariffs, benchmarks, processing platforms, and regulatory dealings needed to stay on top of today’s complex telecom industry.
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