Invoice Process Optimization: Data Collection

22 February 2017 Rating

Data Collection, the Foundation of a Successful Invoicing Process

The quality of the invoicing process hinges on accurate data. Without proper data, it’s impossible to create accurate invoices. This not only impacts subsequent processes but also affects customer satisfaction and even business results. Garbage in, garbage out.

This data originates from various sources, often multiple internal systems and sometimes third-party systems. Typically, these need preprocessing before they’re usable for actual invoicing. This subprocess, data collection, can be complex. Many businesses struggle with this front-end part of the invoicing process. Conversely, if this aspect is well managed, it paves the way for a smooth invoicing process.

This is part two of a series of blogs by FIQAS about optimizing invoicing processes. In this blog, we’ll address: How do you successfully organize the crucial data collection subprocess, and what practical challenges do you encounter?

The Front-End Process

The invoicing process is preceded by other processes like acquisition, ordering, product setup, activation, and delivery. Errors or omissions in these processes have ramifications for invoicing. Hence, it’s crucial that these processes are well set up.

These processes generate various data types relevant to invoicing: customer details (personal and business information), contract details, product information (codes, descriptions, prices), order data (quantities, product codes), and other transactional data, especially consumption data.

In the simplest scenario, all this data is registered in a single large ERP system that also handles invoicing. However, this approach has significant drawbacks, often resulting in highly inflexible situations where implementing changes becomes difficult, if not impossible, and incurs high costs in all variants.

In practice, there are often various separate source systems delivering data to the invoicing system. This can vary by industry. For instance, companies in the telecom sector depend on network operators like KPN, Vodafone, or T-Mobile for their consumption data (in the form of CDRs, Call Detail Records, or IPDRs, IP Detail Records).

To collect and process all this data to feed into the invoicing platform, an automated process needs to be established: data collection.

Fetching, Processing, and Consolidating Data

Modern technology offers multiple options to transfer data from one platform to another. Choosing the interfacing method depends on various interconnected parameters:

  • The timing of the process. Are the data needed in real-time, near real-time, or can they be delivered at a lower frequency?
  • The volume of records. The larger the dataset, the more important the distribution for system performance becomes. Are the data delivered in bulk or not?
  • Reciprocity and complexity. Should the invoicing process send data back to the source system? For instance, if data is bulk-delivered, the frequency might be lower than when data comes in real-time. Automatic linkage between two systems suits the latter case.

Challenges in Data Collection

The data collection process has its own challenges. Here are a few examples:

Incomplete data: Data might not always be 100% complete

The invoicing process assumes that the source data is correct and complete. However, the more source systems involved, the more complex data collection becomes. It becomes nearly or completely impossible to have 100% complete relevant data when it’s time to invoice. However, the process needs to continue because invoices need to be sent out. Hence, the invoicing process and platform must handle non-invoiced consumption and any other unprocessed elements from previous periods.

Telecom mediation: Converting large volumes of raw data (real-time or near real-time) into usable invoicing data

In telecom data collection, mediation plays a central role. Mediation is the crucial and complex step after acquiring CDRs or IPDRs, where raw consumption data is converted, standardized, and consolidated into data types usable for the next step in the process, tariffing. Given the large number of consumption records, it’s important that this usage data is read directly and with a high frequency (real-time, near real-time, but at least once a day) by the invoicing system from the provider(s) switch or switches. The mediation platform might be part of the telco’s setup or be part of an external billing services provider’s software.

Thoroughly Design the Data Collection Process

Lastly, a challenge inherent in any automated process is designing the data collection process thoroughly. This entails carefully mapping out:

  • What data does the invoicing process need?
  • Which system should provide them?
  • How can the data structure be mapped onto the receiving invoicing platform’s structure?
  • How is consumption data mediated?
  • What other preprocessing of data is needed and when/where does it take place?
  • What infrastructure is required to ensure the process’s security?

Moreover, it’s crucial to set up the data collection process flexibly, with a rollback mechanism for error correction. Most importantly, the process, with all its dependencies, needs rigorous testing. Properly addressing these aspects provides a solid foundation for a healthy invoicing process. This maintains customer satisfaction and reduces administrative pressure. For instance, because there are few or no invoices that need to be credited. An invoicing process that also ensures optimal cash flow.

Smooth data collection keeps garbage out of invoicing

Data collection is a process where automation and proper controls can prevent the invoicing process from being fed with ‘garbage’. This process can (and should) include options for automatic correction post facto. By preventing problems at the forefront of the invoicing chain, there are fewer errors to rectify afterward. The investment in thorough analysis and appropriate technical solutions pays off in a smooth, low-error process that translates into satisfied customers and maximum cash flow.

Other Topics and the Purpose of this Series:

  • Part 1: Invoicing, It Can Be Better
  • Part 3: Tariffing
  • Part 4: Invoice Production and Distribution
  • Part 5: The Debt Collection Process

The experts at FIQAS have extensive experience in setting up, executing, and optimizing invoicing processes. The business cases we encounter often focus on one or two of the aforementioned aspects. With this series of articles, we aim to address the bigger picture. In part three of this series, we’ll delve extensively into processes and best practices concerning tariffing.

Erik Henselmans
Hillebrand Kuypers

FIQAS has been an authority in invoicing processes since 1989, serving renowned clients both domestically and internationally, operating from Aalsmeer.

More information?

Keen to find out if our platform is right for your organisation? Would you like to find out more or do you have any specific questions? Then get in touch. We’d love to talk!

Willem Lemmers

Senior Consultant

+31 297 382323

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