Large enterprises with hundreds of locations often deal with the hair-raising problem of trying to receive, correctly process, and pay utility invoices on time.
This can especially be a big challenge when dealing with utility services because enterprises typically must process greater volumes of utility invoices than traditional telecom invoicing within the telecom expense management (TEM) arena for these same enterprises.
Moreover, payment terms for utility services are typically shorter than those for other services (e.g., telecom and other enterprise vendor services).
This most often leads to late payments, which incur fees and related issues such as unwanted disconnections. Naturally, no one wants this. How to avoid it?
Centralized Invoice Payments and Bill Aggregation for Utility Services
One main strategy that works best to mitigate this very common industry-wide challenge is centralized control over the invoice payment process. It seems simple, yet most enterprises struggle with this situation without professional support and expertise in this area.
A reputable utility expense management provider or telecom/technology expense management provider supporting utility services will know exactly how to help. They have dealt with this challenge repeatedly.
Beyond experience, a competent expense management provider will have a technology platform specifically designed to proactively manage enterprise utility data and corresponding best consulting practices and systems built to solve this challenge, amongst other expense management requirements.
In sum, they have made significant investments into solving this problem for enterprises so they can do better things like focus on their core business.
In the technological world, it’s always about the three primary levers of people, process, and technology that drive results.
Let’s examine in more detail some of the ways that an expense management provider will assist your organization to mitigate this common utility expense management challenge, even altogether eliminating it.
4 Ways Centralized Invoice Payments Avoid Late Fees & Unwanted Service Disconnections
Industry-specific expertise is invaluable for strong utility program management: We often speak of the virtues of the three levers that expense management leaders can pull. They are technology, processes, and people.
You really do want strong expense management fitness in each of these areas; they are all needed, but people will always be especially important because they are necessary in critical ways:
1. Strong process and technology platform provides a stable foundation for making invoice payments:
A reputable expense management provider will have best practices set up around prioritizing the electronic receipt of invoices (e.g., EDI) but will also be prepared to process invoice information efficiently via other means such as paper or provided via a web portal, etc.
For example, optical character recognition (OCR) technology will be leveraged to properly capture invoice data from paper documents down to the most granular levels, which will be introduced into the technology platform for centralized processing if not available via EDI.
These capabilities and focused and centralized processes allow for the most effective means of tracking utility invoicing. Managing general ledger (GL) coding and allocation functions is also facilitated by the technology platform’s ability to configure according to your organization’s unique needs.
Utility invoicing data that is appropriately organized and aligned within the system is now highly amenable to audit and other review activities that are core to this process. For example, workflows will be built to conduct variance audits and flag discrepancies, produce custom accounting upload files, assist in executing payments, and perform any needed reconciliations.
An invoice queue can be leveraged (e.g., we do this at Tellennium) that assists with notifications statuses of invoices received versus not received. Additional functionality around monitoring physical billing address information for all invoices maintains tight management on ingress into the system for processing.
A cost discrepancy queue also helps management quickly assess critical information to streamline the invoice payment process further.
It’s the powerful use of technology, best practices, and systems that react to any missing invoices in real time, eliminate late fees, and avoid unwanted service disconnections.
2. Tight inventory management is integral to making invoice payments:
When performing audits of invoicing, it’s important to leverage inventory data against invoice data. A strong expense management provider will possess relational database capabilities within its system to reconcile different data sets (e.g., invoice data vs. inventory data for services).
For example, new orders can automatically be updated to inventory, facilitating invoice auditing. All moves, adds, changes, and deletions (MACD) orders placed through the system are updated within the inventory. The updated inventory data is related to contract data within the system and validated against the invoicing.
This cross-functional data capability ensures that all data within the system is up to date and that management is best positioned to take the next appropriate action in the payment process, thereby reducing the possibility of late payments and corresponding late fees.
3. Best practices for bill aggregation and invoice payments help streamline the payment process:
Many enterprises benefit tremendously from gaining outside support. The expense management provider can develop batch transmission files for the invoice payment cycle which is designed to upload directly into the customer accounting system.
A customer funds account will be set up for the customer if invoices are to be paid by the provider. In most cases, the provider will execute all needed payments that day or within three business days at the latest, which places payment responsibilities front and center with the expense management provider, which is where you want them.
Moreover, a reputable provider will perform payment reconciliation exercises to ensure that all utility vendors accurately receive and post payments accurately.
4. Highly focused and responsive process for missing invoices eliminates late payments:
Different providers may do this differently but the key takeaway for any discovery conversations with potential expense management providers is to ensure they have a solid process that they will stand by.
At Tellennium, any missing invoices are automatically flagged within our system as exceptions and are produced within a missing invoice report. Our team will aggressively seek and acquire invoices not received in real time.
A missing invoice queue is utilized as part of daily processes, given its importance as a core expense management activity.
Closing Thoughts on Centralized Invoice Payments
Enterprises need to manage basic expense management functions tightly and work to get the foundational or core responsibilities in hand and under control. This means no late payments and fees or unwanted service disconnections due to non-payment.
When enlisting the support of a reputable expense management provider’s support, they can assist with strong centralized control for utility invoice payments.
They will possess the people, processes, and technology needed to avoid these very common problems of late payments and unwanted service disconnections that are common for enterprises less supported and organized.
If you’d like to consider Tellennium in your utility expense management vendor comparisons, contact us to schedule a brief demo of our solution.
Call now for a no-cost or obligation demo.(800) 939-9440
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