Here at vCom we see four key components of the Invoice Management process that are often poorly understood, and more likely are neither considered nor even possible without the advent of a tool in place to help solve these problems: Invoice Normalization, Consolidated Billing, Invoice Approval Workflow, and Audit & Dispute Management.
Managing IT spend in the enterprise can be a Herculean task with the rise of so many disparate services across the IT organization, from Voice & Data to Mobile & Collaboration.
In many companies, this task is further complicated by the fact that different departments are often responsible for managing invoices for different services. IT may manage Voice & Data while another group may manage Mobile, Collaboration, and other services.
1. Invoice Normalization
When dealing with a diverse set of invoices across multiple providers and services, the first challenge is standardizing on charges, or as we call it, Invoice Normalization.
With numerous mergers and acquisitions in the telecom and IT space, one might think that an invoice from a provider in one state would look similar in another state. This is far from the case. Although the companies have merged, their billing systems have not. As a result, charges that are in fact identical will have totally different descriptions from one location to the next. To put it simply, a recurring charge for a “local line” might have a completely different description on an invoice from one location to the next because of this lack of merged billing systems.
With an Invoice Management Platform in place, these charges can be normalized across invoices, meaning the very same description from one invoice to the next – regardless of location or provider. Another benefit of Invoice Normalization is that by leveraging an Invoice Management solution, an invoice from one provider will look that same as an invoice from another. Taxes, regulatory fees, and the like are now easily viewed across invoices from various providers and services.
2. Consolidated Billing
Invoice Consolidation is yet another benefit of an Invoice Management Platform. We at vCom are able in many cases to dramatically reduce the number of invoices customers receive by consolidating services onto one bill whenever possible, thus greatly reducing your Accounts Payable (AP) processing costs. According to a study from the Institute of Financial Operations, the cost to process an invoice can be as much as $25 per invoice for many mid-sized companies.
And when it’s not possible to consolidate all services onto one invoice, an Invoice Management Platform will provide standardized viewing of all invoices via Invoice Normalization – and this efficiency alone will help improve your AP processing efficiencies.
3. Invoice Approval Workflow
Without a formal process or system in place to approve invoices, it can be time-consuming to shuffle paper invoices for approval by various levels within your organization. This can result in frequent delays in payment, resulting in costly late fees. Invoice Management provides efficiencies in Invoice Workflow Approval by automating the approval process, while also providing an audit trail should that be needed.
4. Audit & Dispute Management
In a company with multiple locations across the nation or around the world, the quantity of invoices to manage can easily add up into the hundreds or even thousands across different services. Auditing these invoices is often too daunting a task for a single analyst to tackle. Companies typically will simply pay these invoices without any attempt to validate them.
Within our aggregator division, vCom receives hundreds of very large invoices for all of our customers. While these invoices aren’t simply “passed along” to our customers (we have our own Billing System), we still need to audit these invoices, as this is core to our business. In our experience in the Voice & Data world, 60% of carrier invoices have errors on them each and every month. We track each of our disputes – both those recurring each month, as well as one-time impacts. In 2016, we recovered over $1.4 million in erroneous charges from carriers and providers. And the time it takes to resolve these errors with carriers can be monumental. We’ve had some disputes take over a year to resolve!
And since we won’t bill our customers off the carrier bills, these are errors that you will never see, and thus won’t have to ever bother with. We have an entire Revenue Assurance department, and this is their sole task. This is a key benefit of outsourcing your Invoice Management Auditing to a Life Cycle Management firm. Auditing invoices is most likely not your core business – and it shouldn’t have to be. Entrusting vCom do this on your behalf will allow you to focus your resources elsewhere, while saving you much money, time and effort by letting us correct these errors for you.