Missed revenue and over-charging can add up to more than 2% annually
How often do you bill your customers? Monthly? Quarterly? Do you worry that your billing teams might approach this routine activity as perfunctory rather than a recurring opportunity for growing revenue in a big way?
Worse yet, what if your teams fully realize that a plethora of price increases, cost pass-throughs, incremental services fees and other pricing variables exist BUT they just don’t know what they are, where to find them or how to map them to your customer billing data?
Some conscientious billing teams attempt to piece together these critical pricing variables from dozens of negotiated contracts, amendments and order documents. But it’s usually a thankless and futile effort that takes forever to accomplish, only to have the information quickly expire. Talk about frustrating! Meanwhile, millions in revenue continues seeping away with every invoice.
Here’s a true story
I recently talked with a large, $350M colocation company struggling to stop the sizable revenue they knew was leaking from their customer billing activities. Forty percent of their documents had active price changes, but they had no idea where those changes were across the portfolio of customers.
They tried to solve the problem, using temp data entry help to compile renewal dates and price increase variables into a report for billing’s use. But as you might expect, accuracy was hit or miss, and even correct information became out-of-date within days or weeks.
Even with the data in hand, they couldn’t map the terms to the asset management or billing systems, which directly impacted how accurate the information was that billing had to work with. As a result, it led the team to apply inaccurate pricing increases to some customer accounts.
As you can imagine, customers didn’t take too kindly to receiving incorrect invoices. Margins took a hit, not to mention customer satisfaction.
This story does have a happy ending. The company quickly recognized the current method just wasn’t going to cut it—they needed a systematic solution. When they engaged Pramata for a personalized Impact Analysis, we discovered $10 million in leaking revenue related to missed price increases alone from across a few thousand customer accounts. And now, they’re on their way to recapturing that sizable amount of profitability across their customer base.
The more you know
Stopping this revenue leakage takes more information than just a price sheet. For 100% billing accuracy, you need an always up-to-date, accurate record of current pricing and commercial terms that your teams can easily access and act on.
Pramata’s Billing Accuracy solution leverages our innovative digitization-as-a-service (DaaS) capabilities to transform commercial documentation—MSAs, amendments, order forms, and more—into this reliable source of truth for the latest pricing terms that’s updated daily. We then map these terms to the appropriate records in the company’s order and billing systems, so teams can easily understand which terms apply to which records, and can bill every customer confidently.