Understanding Telecom Billing Errors: Causes & Solutions

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Telecommunications is a critical component of modern business operations, yet it’s also an area where inefficiencies and hidden costs can quietly erode profitability. One of the biggest challenges organizations face is identifying and resolving telecom billing errors, which can cost businesses thousands—or even millions—of dollars annually. This blog explores the importance of Telecom Expense Management (TEM), common causes of billing errors, and practical solutions to optimize telecom costs effectively using telecom expense management software.

What is Telecom Expense Management?

Telecom Expense Management (TEM) is the process of monitoring, controlling, and optimizing costs associated with telecommunications services, such as voice, data, and mobile plans. A telecom expense management provider assists businesses with enhanced visibility into their telecom expenses, helping to identify inefficiencies and unnecessary costs, and managing high and unpredictable telecom expenses.

By leveraging TEM, companies can streamline operations, negotiate better contracts, and prevent overcharges or errors from service providers. In today’s competitive landscape, effective telecom expense management isn’t just a cost-saving measure—it’s a strategic advantage for improving overall business efficiency.

How Are You Billed for Telecom Services?

80% of Telecom Bills Contain Errors- According to Gartner, a staggering 80% of telecom bills include mistakes. While it’s tempting to believe you’re among the fortunate 20%, the reality is that many businesses unknowingly overpay for telecom services due to simple errors that go unnoticed for months.

Unfortunately, spotting these mistakes is no easy task. Telecom invoices are notoriously complex, filled with intricate details and industry jargon that can make even the most attentive review process fall short.

A standard telecom invoice typically includes:

Non-recurring charges (NRCs)
Monthly recurring charges (MRCs)
Usage fees
Overage fees
Taxes and regulatory fees

While these categories may seem straightforward, they often involve significant complexity. For instance, a Monthly Recurring Charge (MRC) for long-distance calling may be accompanied by additional usage fees upon service utilization. Certain call types may be subject to contractual fees, and distinct charges often apply to inbound versus outbound calls. These multifaceted billing structures frequently create confusion, making it difficult to ensure billing accuracy.

Causes of Telecom Billing Errors

The primary driver of telecom billing errors lies in the complexity of modern telecom networks and services.
Businesses often work with multiple service providers, each offering various plans for voice, data, and mobile services, which can result in inconsistent billing practices.
Telecom service providers play a crucial role in managing vendor relationships and tracking service performance.
Errors may arise from overlapping contracts, outdated plans, or unused services that continue to incur charges.
Manual processes and a lack of centralized visibility make it challenging for organizations to detect discrepancies, leading to hidden overcharges.

Some common indicators of high telecom expenses include:

Unpredictable and fluctuating telecom bills
Lack of visibility into telecom usage and spending patterns
Inefficient usage of telecom services and assets
High costs associated with mobile devices and plans
Difficulty in managing telecom contracts and vendors, and streamlining various telecom-related operations through effective telecom service management

Watch out for these five areas of potential overbilling (and cut your monthly technology spend by up to 20%).

Overbilling for Services: Negotiated rates with carriers are sometimes overlooked in monthly billing, leading to inflated charges.
Double Billing: Miscommunication, software glitches, or product name changes can result in duplicate charges for the same service.
Informal MACD Processes: Without centralized tracking, setup fees, duplicate services, or facility issues may lead to one-time errors.
Lapsed Real Estate: Businesses often forget to cancel telecom services after relocating or downsizing, resulting in unnecessary charges.
Contract Discrepancies: Mismatches between contract terms and invoices are harder to spot in complex environments.

Solutions for Telecom Billing Errors

Work with a Telecom Expense Management Provider

Working with a Telecom Expense Management (TEM) Provider streamlines the process by matching inventory, vendor details, and contracts, significantly reducing billing inaccuracies.

Automation and Streamlining: TEM providers can automate invoice processing, usage monitoring, and cost allocation, reducing the reliance on error-prone manual processes.
Error Detection: Advanced analytics and reporting tools can flag anomalies, identify redundant services, and correct discrepancies before they escalate.
Policy Enforcement: By enforcing telecom usage policies, companies can prevent unnecessary expenses, such as unauthorized roaming charges or excessive data usage.

Best Practices for Working with a Telecom Provider

Define Clear Objectives: Clearly outline your goals for partnering with a TEM provider, such as cost reduction, improved efficiency, and better visibility into expenses. Specific objectives will help both parties align and measure success.
Conduct a Thorough Needs Assessment: Collaborate with the TEM provider to assess your organization’s telecom needs. This includes understanding the services, devices, and vendors involved. A detailed evaluation ensures the provider’s approach addresses your unique requirements.
Select the Right Provider: Choose a TEM provider with expertise, tools, and services that fit your organization’s needs. Key capabilities include invoice processing, inventory management, and cost allocation support.
Develop a Comprehensive Plan: Work with the TEM provider to create a structured plan for managing your telecom expenses. This should include timelines, milestones, and resource allocation to ensure organized and effective management.
Ensure Training and Support: A reliable TEM provider offers training and support to help your team understand the processes and maximize the benefits of their services. This ensures seamless collaboration and user adoption.
Monitor and Evaluate Performance: Regularly review the results of the TEM provider’s efforts. Ongoing monitoring helps identify areas for improvement and ensures that your telecom expense goals are consistently met.

By partnering with an experienced TEM provider, organizations can effectively optimize telecom expenses, enhance operational efficiency, and achieve long-term cost savings.

Take Control of Your Telecom Expenses

A well-executed telecom expense management process not only enhances cost savings but also improves operational efficiency, making it a strategic advantage for any organization.

A telecom expense management provider can help organizations to streamline their telecom expense management processes, gain visibility into telecom usage and spending patterns, and optimize their telecom services and assets. By implementing TEM, organizations can achieve significant cost savings, improve transparency and accountability in telecom spending, and enhance their overall telecom expense management.

Selecting the right telecom expense management provider is crucial. A provider that excels in inventory management capabilities, including regular audits and optimization solutions, ensures accurate tracking of requests, approvals, and customer service interactions.

Optimize Your Telecom Expenses with PSM Partners

At PSM Partners, we specialize in tailored telecom expense management consultation services designed to save your business money. Start with a free telecom audit to uncover billing errors and cost-saving opportunities. Our proven process has saved clients over $10 million—don’t wait to start saving!

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