5 Tips for Fixed Line Telecom Expense Management (TEM)

Expert Blog

For the Business with less than $100,000/month on Telecom Spend

1. Collect Invoices Much has been said about the need for gathering “inventory”, however to gain immediate control of expenses nothing is more effective and necessary than gathering all the telecom invoices into one place and developing an invoice inventory. Have accounts payable provide you with a list of all telecom related vendors and vendor account numbers. Match these to an actual copy of the invoice. At a minimum, create a spreadsheet with the following fields: Vendor Account # Current $ Valid (?/n/y) Media AT&T Xxxxxx $40,000 Y Paper Verizon Yyyyyy $34,000 Y CD If you are in a decentralized environment, you will have to contact all locations and ask them to forward copies of all telecom related invoices to you.

2. Centralize Make requests to the telecom vendors to have the invoices sent to one central location where all telecom invoices will be processed. Some vendors will do this easily in one or two billing cycles, others may take up to six billing cycles and require multiple phone calls. Determine the billing media type you want to manage. While paper is not efficient, electronic billing media can be difficult to use without the tools available from reputable TEM vendors. If you are undertaking the collection and centralization effort prior to implementing a telecom expense management system or BPO, you should wait to convert to e-billing formats and allow the TEM vendor to do it for you.

3. Allocate and Validate If you are going to manage the invoices without help from a TEM vendor and without TEM software, keep the allocation simple. Usually this means allocating at the account or sub-account level and not attempting to allocate based on usage (variable charges) or pro-ration. Do not engage a TEM vendor that requires e-mail exchanges with you every month to handle allocation and bill pay. This process should be streamlined. The minimum validation applied to invoices in the payment process should consist of the following:  Is this a valid account?  Have previous payments been applied properly?  Are there any charges or subaccounts that were not here last month and are they valid?  Are the major rates (i.e., the $400 monthly access rate) accurate? The difficulty in validating invoices without automation cannot be underestimated. The best way to allocate charges and validate invoices is systematically with an automated tool. TEM systems exist that can automatically validate every charge on an invoices and allows you to focus on the exceptions/resolution process rather than on the identification process. Third-party auditors and TEM providers can also perform this monthly recurring task of resolution, but automation should be demonstrated by them or the benefits will be limited to labor arbitrage.

4. Pay and Close the Loop Accounts payable should receive a file from you weekly that has all the payment and allocation information in a structure that can be imported into the accounting system. If using a TEM vendor, this process should be fully automated or initiated by your accounts payable team. To “close the loop”, have your accounts payable IT create a process to export a file weekly that can be uploaded into the TEM system with the following information: vendor, account number, check number, paid amount, date. This information will be integrated with the billing record and archived in the TEM system. This way you won’t need to call A/P when a vendor has a payment question – you can simple go to the centralized TEM system and have all the answers.

5. Reports and Analytics Depending on the size and complexity of the telecom spend environment, the tools required for reporting vary greatly. At a minimum, you should be able to provide the following monthly reports:  Spend by vendor  Spend by service type  Spend by account  Spend by General Ledger Code We recommend you provide these reports showing prior months so you can see trends and anomalies. Bonus Once these activities are working and you feel that the “easy” saving opportunities have been addressed, you may want to consider using a third party auditing company to provide a rigorous audit. With your information centralized and organized, you should be able to easily work with the third party and quickly get additional results.