The relationship between telecommunications companies and their commercial accounts is anything but simple. Customers may purchase a number of variations of products, services or assets. Each one possessing unique pricing schemes, applying to a multitude of customer sites, and including product or service bundling and discounts designed to secure the deal.
Once the customer is provisioned, MACD (move, add, change, disconnect) activities happen frequently …creating ever-changing terms, dates and services … leading to additional fees and new states of entitlement.
If it sounds like billing errors are inevitable, that’s because they are.
Companies try to stop errors but fail
A billing analyst often creates their own heavy-lift manual method to find, interpret and compare contracted terms and entitlements against what product or services are actually billed. That would be hard enough. But they’ll also need to reconcile the differences between the contract and billing system in order to determine how to permanently correct the errors.
No person or even team can manage the volume and complexity of relationship information, along with the tricky billing system work-arounds, on a timely, ongoing basis. That’s why many of the telecom companies we’ve worked with have found substantial billing errors (on average) in 5% to 30% of all their customer accounts.
The top 7 billing error sources identified
We can trace most of these billing errors to one or more of 7 breakdowns within the commercial relationship.
1. Customer Set Up - The customer relationship is not set up correctly following initial deal. This could mean missing or ignored documentation.
How Pramata helps: We integrate into the post-signature distribution process, and establishes the Commercial Relationship Baseline with 99% accuracy. This Baseline is used to populate fields in billing, and reconcile information immediately after an initial run to detect errors.
2. Customer Change Management - Changes to the commercial relationship baseline are not updated and reflected in the billing system.
How Pramata helps: We integrate into the post-signature distribution process, and update the Baseline as MACD activities happen, identifying missing document exceptions.
3. Product- and Bill-to-Contract Mapping – Billing analysts can’t determine which contract document underlies the line item to be billed. This often occurs because customer entities, product names and site locations listed in the billing system do not exactly match the contract.
How Pramata helps: Our reconciliation engine matches price, product, entity and location. As exceptions are flagged, we develop additional rules to reflect modified nomenclature and repeat this process on a daily basis.
4. Application of Conditional Logic - The contract defines various scenarios in which different pricing should apply. For example, price uplifts tied to greater of CPI or 3%.
How Pramata helps: Pramata converts the contractual language that defines the business logic into rules. Our reconciliation engine applies these rules, and keeps them updated as changes occur.
5. Misapplied Complex Pricing Structures - It is difficult to compare a customer’s actual consumption to pricing tiers, and determine the correct amount to be billed.
How Pramata helps: We map the products in the contract to what the customer has actually consumed, and apply the most up-to-date rules to determine the expected price.
6. Non-uniformity of Billing Between Products - The variables that drive billing decisions differ between products.
How Pramata helps: We establish the Commercial Relationship Baseline at the asset or product-level. We capture all variables required for billing and associate them with the product, so we can map to and reconcile within multiple billing systems.
7. Billing and Audit Team Workload - Billing teams are focused on day-to-day operations, and don’t have time to audit accuracy. But audit teams only evaluate a subset of bills for a subset of accounts, and with limited frequency.
How Pramata helps: Pramata automates the reconciliation and audit process and identifies exceptions with ongoing precision. This increases your audit coverage while focusing your team’s time on areas of potential errors.
I invite you to take a closer look at Pramata’s Billing Accuracy solution for telecommunications companies. Or if you’re ready to take the first step right now toward ending the vicious cycle of under- and overbilling, let’s talk!