FINANCE: Data Quality is Critical for Accurate Billing and Optimal Revenue Collection
Recent Gauteng Business News
The ability to collect payments is the cornerstone of any successful business. However, studies indicate that organisations may lose as much as six percent of their potential revenue because of discrepancies between selling and payment collection. Billing errors account for a large proportion of these issues, reflecting inefficient internal processes that lead to significant revenue leakage writes Gary Allemann.
Data quality initiatives and effective data governance can assist organisations with addressing billing errors, optimising revenue collection, and ultimately maximising the bottom line.
The end goal of the ordering process in any business is obviously to collect cash – this is how businesses maintain profitability and continue to deliver services. However, in many organisations a significant number of orders fail to translate into cash, resulting in lost revenue. The culprit for this revenue loss is often an error somewhere in the billing process, with customers not receiving their bill or receiving the incorrect bill, leading to non-payment or underpayment of amounts. Aside from non-payment of accounts, inaccurate billing processes can also erode customer confidence and lead to delays in invoice processing, since customers may decide to conduct an investigation of each invoice prior to processing payment.
Billing errors typically occur as a result of disconnect between the purchase order and the invoice, often due to incorrect or missing data somewhere along the line. In addition, issues such as incorrect customer classification, expired discount codes and faulty system default values can cause problems. Electronic billing solutions have lulled organisations into a false sense of confidence around the accuracy of their billing process, but the reality is that simply implementing technology is not a silver bullet solution.
While technology can assist with improving processes around billing, many organisations discover that the challenges with invoicing and billing remain. Electronic billing systems still require accurate customer information, and it is essential to address this data challenge in order to ensure optimal revenue collection.
One of the key data quality dimensions that contributes to improved customer billing is data accuracy
Completeness of invoice details determines the successful execution of the billing process. With automated invoicing solutions, the absence of vital details may lead to an invoice not being processed and billing not being completed. If a customer’s email address is captured incorrectly, for example, they will never receive their bill and therefore will not pay it. There are a number of issues or challenges contribute to revenue leakages or billing errors, not least of which is inconsistent customer data. Incomplete customer, rating or product information can lead to discrepancies in the billing process. Additional challenges include issues with services being activated and billing accounts not being created, or billing accounts being created but contracts of service not being addressed. In addition, when billing has been closed but services are still being provided, further challenges can ensue.
Active data governance and data quality improvements are essential in assisting with accurate billing processes
The introduction of active data governance begins with identifying critical data elements that are essential in the generation and the eventual distribution of invoices. This will ensure a company-wide awareness of the required data that must be captured by the initial process such as order management. In addition, data quality profiling can assist with identifying data anomalies, and such a process can be incorporated as a prerequisite into existing invoice and billing processes. In order to ease this process, intelligent software solutions can be implemented to eliminate the complexity of data analysis through dynamic data analysis, which allows for data profiling with data at source, as well as the ability to conduct sampling where necessary.
Ensuring optimal revenue collection can make a significant positive contribution to the bottom line of any business, and part of this process involves ensuring that billing is accurate, error-free and delivered timeously. This is a key component in facilitating payment of accounts and maintaining cash flow throughout the organisation. Implementing data quality and data governance initiatives to address customer information and other data accuracy for the billing process is imperative for optimal revenue collection.
Business News Sector Tags: Finance|