Telecom invoices are very confusing for many consumers. Everyone appreciates the convenience and features that smartphones offer, but understanding charges incurred for voice, data and messaging is another matter. Family plans offer cost savings, but they can also make phone bills more cumbersome and confusing.
The truth is that most consumers don’t really understand their personal phone bills. When they review their monthly statements, they may check their data usage and validate the number of cell phones associated with their plans, but most don’t have a true understanding of the hidden ancillary charges, plan overages and taxes associated with their bills. With no easy way to confirm accuracy, many consumers have no choice but to trust their carriers to make sure these charges are correct. The same is true for telecom bill payors at companies of all sizes. Most don’t really understand the complex details of their monthly invoices and they often have no guaranteed method of validating that they are being charged correctly by their providers.
Yet, overcharges for corporate telecom expenses are a reality and far more common than most people think. It’s been reported that billing errors average 5% to 12% of telecom services budgets. These overcharges are not the result of intentional price gouging. They often result from antiquated billing systems that allow for invoice inaccuracies that can become significant over time. Telecom companies are willing to correct erroneous charges when they are challenged, but the onus is on the bill payor to scrutinize the bill and make sure it’s correct. That is not an easy task.
The leading causes of overcharges/overpayments include:
- Historically incorrect billing due to carrier use of antiquated billing systems
- Lack of asset validation
- Plans that include services that are no longer needed or that employees are unaware of
- Taxes and surcharges that are incorrectly calculated
- Mobile overages
- Excessive roaming charges
- Lack of time, training, and resources to efficiently manage telecom expenses
As companies become more reliant on a variety of different wireless and wireline technologies, their telecom bills are becoming more complex and confusing. Cloud computing, SaaS and the Internet of Things (IoT) have significantly added to invoice complexity. Companies that struggle to manage this process internally often use TEM providers to assist them in managing telecom costs, resulting in more efficient payment processes, as well as the identification of cost savings from audit, optimization, carrier contract negotiations, and data analytics.
In some cases, the management of telecom expenses is fully outsourced to a TEM provider. Cost savings for companies that use outsourced TEM services are estimated to be between 8% and 10% of their annualized telecom costs. TEM services also allow for staff augmentation so that company resources can be freed up and reallocated to perform other tasks. There are currently over 90 certified TEM providers in the U.S. They are responsible, not just for timely payment of their clients’ telecom bills, but typically for a variety of other services such as:
- Audit and Optimization – Verifying that rates are consistent with carrier-specific contracts or tariffs and ensuring maximum cost savings are yielded with pooling efficiencies
- Asset inventory – Making sure that newly procured items are validated as belonging to a company and those unused assets, such as cell phones of former employees, are identified and disconnected so that a company’s inventory includes only the assets it needs and only those assets receive maintenance going forward
- Asset verification – Using the company-specific inventory to ensure validation of assets and provide insight into network costs, improving a company’s ability to make informed decisions based on data analytics
It’s the responsibility of corporate bill payors to keep track of company telecom assets, the rates that have been contracted for, special rates that are available in specific circumstances, how taxes should be applied, etc. If bill payors lack this information or fail to apply it, they can incur extra charges that are completely legitimate, yet unnecessary. Staying on top of this and policing the actions of others can be a full-time job. Having a telecom management system in place protects companies from unknown and unanticipated expenses while allowing bill payors to be more efficient with their time.
The best advice we can offer those with responsibility for company telecom bills is to make sure they have firm control over their charges. Always make sure that rates have been validated within the last 2-3 years and that correct rates are being applied as soon as renewed contracts become effective. Corporate plans, like consumer plans, can be negotiated during the contract renewal period.
TEM providers help companies make informed business decisions, resulting in process efficiencies and long-term telecom savings. More importantly, they offer executives the security of knowing that they are paying their telecom providers only what they should…this usually helps them sleep better at night.
Contact us to learn more about our Telecom Expense Management solution.