Guest Column | August 3, 2020

The Hidden Costs Of An Antiquated Billing System

By Evan Rice,

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For many Communications Service Providers (CSPs), business is on the rise. Despite the economic downturn (or perhaps driven by it as more employees are forced into remote work), CSPs are seeing increased demand as users consolidate their telecom and datacom services with a single platform or provider.

Unfortunately, many of those same CSPs will not realize the full value of these new opportunities. Unless they have automated their billing processes, this spike in new business will be more expensive and significantly more complex to manage than it should be. This can feel like a curse without end for a subscription-based business; every billing cycle will see more money lost to inefficiency.

The Two-Sided Profit Risk

Two potential profit risks exist in manual subscription billing for communications services.

The first is true for any manual process: It takes time to execute. And time—as we all know—is money. While the time and expense of switching to an automated system may sometimes appear daunting, it is ultimately far less costly in the long-term than the figurative “death by a thousand cuts” of monthly, manual invoicing. Once implemented, an automated system quickly pays for itself and then starts sending more money directly to the bottom line.

This pays dividends when business is growing because manual billing ultimately does not scale. At some point, management faces the issue of invoices going out late and a massive overall burden on their billing department staff. And, even if a new team member is assigned to address this problem within the billing department, it will be a while before that incremental staffer is producing the same margins as more seasoned personnel. And who knows how long it will be before there’s additional revenue in line with that new salary?

The second profit leak is somewhat unique to the communications business. Service volumes, features, and regulatory fees are changing all the time. Billing credits are common for all kinds of reasons. With so much complexity, a manual process is bound to have errors. Sure, you could chalk up those mistakes to the cost of doing business. But sometimes those errors get baked into the billing rate. Suddenly, that lost revenue is compounded monthly.

While even the best-automated subscription billing platform is only as good as its inputs, it is much better at forcing best practices. For many functions, automated systems provide a strong guard against human error and solidify the complex elements of customer bills.

And while there is no substitute for proper training, an automated billing platform requires less understanding than a manual process because many of the steps and requirements are already programmed.

A Bold Decision On A Safe Bet

There is simply no parallel between the data insights you can get from an automated system and the forensics you need to get answers from a manual system. Most “analysis” of manual businesses attempts to figure out what went wrong. By contrast, automated systems make it easy to see your business at a glance and plan for the future. What’s more, they’re likely to save you the money you’ll need to execute those plans.

Despite these clear advantages, many CSPs, month after month, put off switching from a manual to an automated billing system because they can’t see a good time to do it. Certainly, the right project plan has to be put in place, with balancing time against onboarding new accounts, sorting out disputes, chasing aging receivables, and managing other administrative tasks.

The thing is, that same situation applies to every company that made the switch. For just this reason, any reliable subscription billing platform provider has comprehensive and proven implementation procedures. Such providers specifically understand the heartbeat nature of their products and services, so they are especially adept at facilitating the switch.

Once you’re on that automated platform, you have so much less to worry about. Think of it as the difference between a truck and a train: Somebody has to always steer the truck. Conversely, you can just set the train on its tracks and turn your attention to loading more paying freight.

That’s the point at which an automated subscription billing platform goes from helping you save money to helping you make money. And that is a short path worth taking.

About The Author

Evan Rice is EVP of Sales and Marketing at