Billing auditing is the process of verifying carefully in
the bill if what was charged by the service provider was what was agreed
to in the contract. This verification includes the recalculation of each
call and the verification of every item charged in the bill.
Typically, most organizations don’t do the complete
recalculation of all calls every month; usually they do that only for the
ones in which big discrepancies between what was identified by the billing
system and what was actually charged were spotted.
Nevertheless, verifying the bills is a necessity in a large
call center. Verification identifies charge discrepancies and enables the
organization to get the due reimbursement for overcharging from the PTT
providers. Experience shows that savings between 5 percent and 12 percent
are usually attainable through regular auditing of the bills. Considering
the expenditures with telecom of large call centers, 5 percent can mean an
enormous amount of money, and therefore auditing the bills usually is
worth the effort.
Here it is interesting to mention that when we say verify
the bills most people think about re-calculating the value charged for the
calls. Although this is no doubt an important part of the verification,
there are several other things that should be checked:
• Verification whether the charges are associated to trunks
that actually belong to the organization
• Verification if there are undue charges for installation
or trunk subscription
• Verification if there are penalties for late payment unduly
charged
• Verification if there are charges for not achieving the
minimum-committed volume
Whether the charges are associated to trunks that actually
belong to the organization should be verified. Although it may seem a bit
obvious, the first and basic verification (very often not executed) is to
check if the bill belongs to the organization, and the resource is
actually being used. It is not uncommon to receive bills that don’t belong
to the organization or previously belonged but the resource was cancelled
or deactivated. In large operations with several sites (sometimes in
different countries), just to be able to check if the bills belong to
the organization and verify if the amount charged is compatible with the
historical value is in itself a difficult task.
Verification if there are undue charges for installation or
trunk subscription is a very common problem. That includes all sorts of
charges ranging from installations fees to trunks subscriptions and
special services. Those charges sometimes are a large percentage of the
bill and their verification is far from easy.
Verification is necessary if there are penalties or interest
for late payment unduly charged. Such charges very often are wrongly
calculated and don’t correspond to what was defined in the contract. The
bill verifier has to check if the penalties and interest are due and if
they were rightly calculated as defined in the contract.
Verification if there are charges for not achieving the
minimum-committed volume is important to verify if there are charges for
not achieving the minimum-committed volume and if these charges were
properly calculated as defined in the contract. Usually, the difference
between what was committed and what was actually used has to be paid in
full.
These kinds of problems very often provoke more overcharges
than the mistakes in the calculation of the calls. Besides the direct
financial gains, auditing the bills enables the evaluation of many other
important aspects linked with the management of a large call-center operation:
• Identifying the delicate balancing act between the minimum
volume commitment and tariffs
• Identifying volume and duration of the calls, which is
crucial to negotiate charging granularity
• Identifying the point at which least-cost route
configuration in the PBXs needs adjustment due to changes in tariffs
• Knowing when it becomes feasible to have a private-voice
network (interest of traffic concentrated in some specific area
code)
• Accurately calculating the number of trunks and circuits
(capacity planning)
Analyzing the voice bills enables accurate answers to all
these questions, and the telecom manager should be aware that the analysis
of a telecom bill is much more than just checking the tariffs. It is also
about verifying the traffic and comparing the current prices against
available alternatives.
The process of verifying the bill usually follows these
steps:
• Verify if the bill and the resources belong to the
organization.
• Verify if the value charged is compatible with the
historical value.
• Verify if the minimum-committed volume was achieved (if
not, recalculate the penalty and check if it was rightly charged).
• Verify if there is any penalty and interest for late
payment being charged.
• Verify if the charging period is correct and if there is
any additional fee being charged for unsolicited services, such as
installation or subscription.
• Identify resources not in use, such as trunks without any
calls.
After verifying these basic items, you should check the
calls, recalculating the value and checking the traffic interest:
• Verify from and to where each call was made.
• Identify the area codes from and to each call.
• Verify how much each call is supposed to cost, based on
the organization’s specific contract, and identify the
discrepancies.
• Identify if the taxes were properly applied.
• Verify if there are calls charged outside of the
admissible charging period.
When auditing telephone bills, it is important to consider
that this procedure is effective only when there is a process in place to
define how and when the organization will be reimbursed. Contracts must
have dispute clauses, and, ideally, the contracts in place should foresee
that. If errors were spotted in the bills before the payment due date, the
organization can notify the service provider and pay only what was
considered due. The values over which there is disagreement must
be discussed jointly. If the charges prove to be right, the organization
pays the service provider without penalties for delaying the payment
(interest is due).
The organization musts define a formal process through which
all invoice disputes are treated. The process needs a definition of time
frames for each party involved and should mirror the dispute resolution
clauses of individual contracts or master agreements. Typically, the whole
process of disputing a bill from identification to solution should not
exceed three months.
The SLA must consider that the invoice payment doesn’t imply
acceptance of the charged values. Ideally, the organization should have at
least one year to audit the values charged, and the SLA should foresee
that. If the errors identified exceed 5 percent of the total value of the
bills, the service providers must reimburse the organization for the costs
involved in auditing the bills. This is a considerable cost and a good
mechanism for keeping service providers accurate.
The organization must define clearly the time after which
charges are not acceptable (in some countries it is defined by law). For
example, services provided more than six months ago should not be charged.
The organization must schedule regular meetings with the
service provider invoice team. Such meetings should be forums to discuss
problems with the invoices and items added, changed, and cancelled.
The organization should try to define standardized invoice
cycles and guarantee that all invoices are due on the same day; this
simplifies the billing and payment process.
Of course, all these recommendations depend on negotiation
at the contract stage and arguably these points belong in the negotiations
chapter. However, these clauses only become meaningful if actual billing
verification is done; without it you will have no recourse or knowledge of
billing errors.
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