You didn’t invoice your customers… Now what?

About 100,000 NS customers did not have to pay for the use of the OV-Fiets and other door-to-door services that they had been using for months. The cause: a malfunction in the financial system which went unnoticed, partly due to corona, and which caused rentals to remain uncharged. The uninvoiced amount – approximately 1 million euros – is significant revenue also by NS standards, which cannot be ignored. Fortunately, it is fairly easy to collect, but it makes sense to take a critical look at the entire order-to-cash process. The question is, what can you do to avoid this kind of mistake?

FIQAS has years of experience in providing essential parts of the order-to-cash chain to its customers, like invoicing and collection. It has set up processes and developed tools that monitor the entire spectrum of both invoicing too much, invoicing too little, or not invoicing at all. A few practical hints.

Hint 1: Work from a structure

Invoicing is a process that requires accuracy and attention. After all, it is the source for incoming payments and thus the lifeblood of every company. In general, billing processes are a series of relatively static steps that must be performed in a certain sequence.

From this perspective, methods can also be devised to test whether these steps have the correct outcome. At FIQAS we, therefore, compile a checklist or report for every billing process. This is used as a control mechanism to ensure that all process steps are performed correctly and that the outcome of the steps is in line with expectations.

In some cases, a check is a test of the results of the automated steps. In other cases, it is a deliberate pause in the process where a billing manager must perform an action after a check to allow the processes to continue. Only when everything is correct, invoicing can continue. Mind you: even a 99.99% correct invoice is an incorrect invoice.

Hint 2: Check whether the processing is conclusive

A simple rule is “What goes in must come out, or can be accounted for”. Whether you start an invoice with hundreds, thousands, or perhaps millions of transactions, all transactions must become part of an invoice. As an exception in the process, you must be able to make problematic transactions wait for a solution. The sum of the processed and not yet processed transactions must match the starting quantity.

At FIQAS we use the word “auditable” for this. Every transaction that is processed in our systems, and there are hundreds of millions of them per month, goes through a number of process steps from import to invoicing. Each process step places a kind of stamp on an individual transaction and for each process, we keep track of how many transactions have been touched by a process. Process totals show how many transactions entered the system over a given period, how many were invoiced, and how many were marked as exceptions in a given process step. It is also clear from the individual transactions which steps they have taken. This form of registration gives the billing manager the certainty that all transactions are in focus, remain in view, and that the processing is conclusive.

Hint 3: Ensure systems are connected

You can still have the processes within the billing domain under control, but if there is a hitch in the data delivery, the outcome of the check that we mentioned in tip 1 will be conclusive, while transactions and therefore turnover are still missing.

To recognize this, it is important that every system in the chain produces a so-called connection report. This is an overview of the numbers of transactions received from one system and the numbers delivered to the next system over a certain period. By comparing these reports, one gains insight into whether the numbers that have been supplied have actually been received. If this matching is carried out throughout the chain, it is ensured that the numbers match up everywhere. This is also the reason that we nearly always set up such reports for our implementations. We also offer appropriate solutions if needed.

Hint 4: The key is in the data

Numbers alone are not everything, it is also about what the data means. Services provided are displayed in digital transactions, which contain the parameters on the basis of which the correct prices can be assigned to the transactions.

Consider, for example, a telephone call, which leads to a transaction in which the caller, destination, time, and duration of a call are the parameters that determine who is charged which price. If incorrect values ​​are given to these parameters within the transactions, this will have an impact on the amounts that will be invoiced. However, the same error can also arise on the other side, if, for example, a wrong rate is administered for a destination.

For checks in this area, (historical) data is your friend. Previous billing runs give a good picture of the types of invoiced turnover over time. This information can be used as a basis for checking the current billing run. When an x-number of transactions of a certain type are offered for invoicing every month and these result in y-value, this gives a reliable indication of the expected numbers and value of the current invoice run. If there are significant deviations, they come to light. Then the reason for the deviation can be sought and remedied if necessary.

There are various analysis tools for performing checks based on historical data and trends. FIQAS has developed tooling for this too.

Hint 5: Trust your instinct

Last but not least, there is also such a thing as your gut feeling, common sense, instinct. This is something you grow by doing billing processes for years. You get to know the normal and the exceptions, you recognize the customers or product groups that deserve extra attention, et cetera. There is no course or book that will teach you this, you develop this feeling in everyday practice.

The billing managers at FIQAS certainly know this feeling. For them, invoicing is a full-time job in which they manage invoicing for different customers every day of the month. Because they do that so often, they build up experience very quickly, probably faster than the average person who only does billing for an organization once a month.

Perhaps the above tips are no news to you and you have arranged everything properly, but it may be that there is an item that you can get started with. At FIQAS we always find it interesting to exchange ideas with colleagues. If you would like to know more about what FIQAS can mean for your order-to-cash chain, we will be happy to inform you.

Willem Lemmers – Principal Consultant at FIQAS (+31 6 54280479 / willem.lemmers@fiqas.nl)

FIQAS is an authority on invoicing processes, established in 1989, with renowned international customers and operating from Aalsmeer (greater Amsterdam area).

Tagged: Billing, Collection, Rating