4 Causes for Telecom Late Payment Fees & How to Fix It

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For enterprise expense management teams, processing vendor invoicing in a timely manner can be challenging. Hundreds or even thousands of invoices often must be processed monthly for a typical enterprise business. With this type of volume, lots can go wrong. 

And when things go wrong in this regard, it translates to late payment fees that can become very costly, especially if large numbers of invoices are impacted by expense management inefficiencies, which can result from a variety of business operational factors.  

The discipline of telecom expense management (TEM) – also known as technology expense management these days – can help to mitigate this very common enterprise expense management problem. As is the case for most things in life, better overall performance always starts with executing better on the fundamentals.  

And paying bills on time and avoiding late payment fees is, without question, fundamental within the world of TEM. Let’s look at some of the reasons why late fees occur within the enterprise business world and how a competent TEM provider can help your TEM team avoid this unnecessary overpayment going forward. 

4 Common Causes for TEM Late Payment Fees

1. Poor expense management processes and systems will cause late payment fees

It sounds obvious but a lack of well-thought-out TEM processes with the support of adequate internal systems (e.g., a powerful TEM platform) will lead to predictable inefficiencies that result in late payments to enterprise vendors, i.e., telecom, utilities, waste management suppliers.

A strong TEM partner can help you shore up your TEM program around enforcing current TEM best practices (subject matter experts will help build out your process) for making invoice payments and certainly provide the technical infrastructure by way of its TEM platform to house and facilitate efficient electronic payments. 

2. Inadequate internal staffing and support will cause late payment fees

As mentioned in some of our other articles, it’s common for most businesses to be experiencing a labor shortage these days. It’s no different in the enterprise business marketplace, which often leads to understaffing or poor staffing.  

With understaffing, there are typically layoffs or corporate “restructuring,” which results in one person trying to do the work of two or three people. There is always the lofty intention to replace the needed headcount quickly, but this rarely happens in practice. The result is predictable and most frequently leads to late payment fees. 

Staffing with resources that are not optimal will also lead to inefficiencies within the invoice payment process. The example to point to here would be outsourcing overseas to staff that is far removed from your core team and personnel in the U.S.  

The cheaper personnel will often come with expense management problems like late payment fees.  So those eager to seek overseas outsourcing to save on front-end expenses will often have these savings offset by back-end challenges like late fees that result from poorly trained or positioned staff. 

By partnering with a competent TEM provider, they will help your internal TEM team staff appropriately, provide expertise with respect to the process, and leverage a TEM platform designed to efficiently process vendor invoicing and avoid late payments altogether.

3. Decentralized expense management staff and poor internal communication will cause late payment fees

Within the world of TEM, we believe it’s best to have centralized TEM oversight of the TEM program so that all TEM processes (e.g., invoice payments) and systems (e.g., TEM platform) are aligned and working in concert to ensure timely and accurate vendor payments.

In short, you don’t have one group in Sun City, Arizona processing invoicing in its own way and with its own tracking system(s) and another in Boston, Massachusetts doing things completely differently.

This type of decentralization is fraught with many challenges in the world of TEM, and we generally do not recommend this approach. By partnering with a strong TEM provider, you avoid the problem of decentralization and get sound central planning, streamlined operations, powerful TEM technology, and insightful one-system-of-record reporting to avoid unnecessary vendor charges such as late fees.

4. Vendor billing disputes will result in late payment fees

Hopefully, your TEM team is doing a good job of reviewing and performing audits on all vendor invoicing. If this is the case, there will be some disputes within the queue, resulting in delayed payments to vendors.

These purposeful late payments still need to be tracked and managed but – congratulations – these are the type of late fees that you may actually want. You will recover these fees when realizing savings in your dispute process, but you still need to track and manage these in accordance with TEM best practices.  

Conclusion: TEM Support and Avoiding Late Payment Fees

As mentioned throughout this article, late payment fees for enterprise vendor invoicing are caused by a variety of factors. They generally relate to three main areas within TEM: (1) personnel challenges, (2) system and process challenges, and (3)  technical challenges (e.g., spreadsheets as opposed to a TEM platform). 

By leveraging a partnership with a competent TEM provider, you avail yourself of the single best remedy to attend to all three of the aforementioned priorities. A strong TEM partner will: 

  1. Provide the requisite enterprise expense management talent needed to get the right folks on the right tasks at the right time, enabling TEM performance and the reduction of late payment fees in this example. (Your TEM management team can turn the dial up or down as needed on labor and get the best results at the best costs.)

  2. Provide the requisite subject-matter-expertise around TEM best practices and processes to drive overall TEM program effectiveness and continually drive efficiencies. (This is where you really tap into the expertise of your TEM partner and help scale your TEM program over time.)

  3. Provide the needed technological platform to properly process TEM vendor invoicing nowadays. The power of the application is a big deal. It’s important in today’s world of TEM and is something you do not want to overlook (e.g., employing automation for alerts, reminders, sending of reports, etc.).

If you’d like to consider Tellennium in your TEM vendor comparisons, contact us to schedule a brief demo of our solution.

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