Communication Bill Analysis And Resolution:
An Important But Overlooked Task Best Accomplished By Outsourcing

BY BRET WATSON

Erroneous telecommunication bills are commonplace in today�s business environment. From the largest communication giants to the smallest local telcos, billings sent to businesses for voice and data communication services are inundated with errors. Incorrect pricing, charges for services never installed, and charges for disconnected services are but a few of the issues that plague communication billing accuracy for companies today, no matter what their business specialty. How can overworked IT departments, stretched to the limit just keeping the network up and working, stay on top of these billing issues that can cost their company hundreds of thousands of dollars each year? Outsource the work to a firm with expertise in bill analysis and resolution.

Outsourcing has become increasingly popular. Astute businesses are looking for ways to do more with less. Today�s economy has forced most companies to downsize their workforces to a �lean and mean� status. Since people are generally a company�s most expensive asset, people are the first to go when times get tough. But the workload normally does not see a reduction. Unfortunately, this paring away of personnel weakens the effectiveness of many departments and what they can realistically get done on a daily, weekly and monthly basis. Such is the case with an IT department. Although an important cog within a company�s machinery, the IT Department is ultimately considered �support.� When cutbacks in personnel are necessary, support positions are generally the first to get whittled away. Therefore, to close the gap of increased IT workload vs. decreased IT workforce, �communication consultancy� firms offering expertise with IT related issues are filling a very important and necessary niche.

Reputable communication consultancy firms are comprised of seasoned professionals in the communications arena providing services as consultants, outsourcers, project managers, carrier agents, network designers/planners, service implementers and contract negotiators. Certain "full service� firms also help their customers get a handle on their constantly confusing and error-laden communication bills. This is a vitally important service because when completed, an IT department will have an organized knowledge of the services they are managing. Even more importantly, significant savings will be achieved making IT a hero in the eyes of upper management.

The key to successful communication bill analysis is organization. The first step in understanding what communication services a company has is to build a topography. A topography is a list of all services -- lines, trunks, circuits, etc. -- that are being used company-wide. The information for the topography comes from the bills themselves with billing number, associated numbers or circuit IDs, billing address, class of service (i.e. POTS, Centrex, T1, DS3), and monthly cost. The information can come from paper bills or electronic media -- whatever billing platform the company is using. A spreadsheet is then developed showing each company location and the associated services at these locations. This provides a snapshot look at what is being spent at each location as well. A topography should be developed for each carrier since each has its own billing criteria.

Once this list of services, by carrier, is completed, an IT department has a base to work from. IT and the outsourced bill auditor can begin the communication service review. The spreadsheet can be scrutinized to determine (1) what each service is for, (2) where the service is going (is it connected to another office or stand-alone), (3) who, if anyone, is using the service, and (4) ultimately, is the service necessary and what impact, if any, would result if the service were to be disconnected.

If it is determined that the service is not needed, it is important to check if it is part of a contract. If so, a decision needs to be made based on the expiration date of the contract and what termination penalty would be paid if the service were disconnected prior to the fulfillment of the term.

Once the decision is made to disconnect (with or without penalty), the service information is added to a separate �disconnection spreadsheet. The purpose of this document is to ensure that each service is disconnected and to keep track of expenses that are now being saved with the removal of the service from the corporate network.

After finalizing decisions on all services that should be removed, a list remains of services that are essential to the successful and efficient operation of the corporate network. It is now the task of the bill auditor to make sure that each remaining bill is current with regard to payment, and if it can be consolidated with other billings of similar class. Additional dollar savings can be achieved with vehicles such as summary bills which combine billings from each vendor for receipt on one day, in one envelope, with one payment due based on a summary of services received. Substantial savings occur with the reduction of accounting department bill review time and the elimination of the need to cut multiple checks on multiple days each month. One payment for each summary is now all that would be necessary.

Finally, the most important -- and likely the most valuable -- responsibility of the outsourced bill auditor is error detection and resolution. The bill auditor scrutinizes each bill for correct pricing based on tariffs, special promotions or custom contract pricing that many times are incorrect and become the chief source of billing errors. A CIO, IT director or telecom manager can agree to and sign a carrier contract but if the carrier representative working the deal does not provide proper follow up after the sale, it is likely that the service will install without the agreed upon special pricing. Companies are then spending significantly more than they should if the billing submits for payment at retail or list cost. Accounting departments then pay the bill as charged without knowledge that many charges are erroneously inflated. It is important for the IT department to provide copies of all agreements in force to the bill auditor to ensure errors of this kind will be detected. Other billing errors sought by a skilled bill auditor include duplicate charges, charges for services already disconnected and charges for services cancelled or never installed. The bill auditor creates a report listing the specifics of the errors discovered and the subsequent overcharges that the company is paying, which many times can reach hundreds of thousands of dollars annually.

But the job is not yet done. The overspent dollars need to be recovered. The bill auditor now becomes the resolution manager and contacts the carrier in question with proof of the incorrect billings. In some cases, the billing errors have occurred over a brief time span. But in other cases, incorrect charges could have been taking place for extended periods. Each carrier has its own rules but normally it is allowed to go back as many as two to three years to recover overpayments. The experienced bill auditor/resolution manager knows how to traverse the maze that carrier billing can be and speaks the necessary �telephonese� resulting in negotiated credits against future bills or, sometimes, a check cut by the carrier to cover the differences. This is sometimes not an easy accomplishment but effective resolution management results in proper credits being issued. Plus, in most cases, the bill analysis and resolution provider earns their payment based on a percentage of the recovered amount. This motivation is a major factor in effective bill resolution.

Bill organization, analysis, decision-making, error detection and resolution are now complete. What now? The need to properly manage the corporate network with up-to-date knowledge of what each corporate location has and to make sure that future bills are accurate does not end. It is strongly recommended to take advantage of any ongoing bill maintenance program offered. These are usually offered on a billable hourly basis. Services would continue monthly with bill reviews to ensure accuracy, updates to the corporate topographies when changes occur, and a detail of errors found with a resolution plan of any issues in dispute.

Ultimately, the outsourced firm can become part of the IT team. Valuable expertise is available to complement existing staff with less expense and risk than trying to hire additional personnel to fill certain voids. As trust continues to build, the outsourced firm can also be used for consultancy purposes in all IT areas including transport issues, network design and advice when planning for future needs and annual budgets.

Ironically, in a business�s quest to reduce expenses by reducing workforce, reorganizing internal resources and narrowing their focus on what tasks need to get done, certain tasks that could help the company save money are missed. An IT department�s daily concern centers on the IMPORTANT issues: Keeping the network operating at peak performance, addressing security issues, supporting company personnel, and, when time permits, planning for future needs and growth. But in today�s economy-stressed business environment, management needs to widen their scope and consider alternatives that can positively affect the bottom line. The decision of IT management to outsource important tasks like bill analysis and resolution is a prime example resulting in the discovery of hidden overspending, the reduction of waste and a more organized and streamlined approach overall.

Bret Watson is a Regional Manager with CONFIGURE INC.-- a Silicon Valley-based communication consultancy company specializing in network design and deployment, transport service implementation, project management and outsourcing such tasks as Bill Review and Resolution. For questions and comments, contact Bret at 408-979-2279 or at [email protected].