Telecom Expense Management, Mobile Device Management, and Carrier Services Blog

6 Tips for quickly auditing your phone bill (local, long distance, data, Internet, cell phone)

Posted by Noel Huelsenbeck on Mon, Apr 28, 2008 @ 03:46 PM

Rarely do companies validate the charges on every single telecom and wireless invoice they receive each month. If you've ever tried to audit one you probably know why. The answer? They're extremely complicated, purposefully complicated some might argue - by being complicated they (the carriers) assume you'll just take a look and decide to pay it rather than doing an exhaustive audit. Who's got time to review and validate tens, hundreds, or thousands of pages of obscure taxes, surcharges, fees, discounts and tariffs from local, LD, wireless, Internet and numerous other telecom providers?

It's been well documented by research firms Aberdeen, Gartner, Forrester and AOTMP that carrier invoices are wrong anywhere from 3-15% of the time, and I would add 90% of the mistakes are in the carriers favor, meaning they overcharged you, so it would make sense to review the charges for accuracy before paying the invoice. Also from the time you receive your invoice you have on average 15-20 days to pay it before a 1.5% late fee kicks in. That can add up to a lot of money so here's a few tips to quickly audit your phone bills.

  • Well for starters it good to understand the different areas of your bill so you have an idea if a charge is valid or not. The FCC has a primer here. We'll go into more detail on access charges, taxes, fees and surcharges in a later post because even when companies do exhaustive audits this section rarely gets reviewed and it's one area that may provide quick results in reducing costs. As the FCC states "The FCC allows local telephone companies to bill customers for a portion of the costs of providing access. These charges are not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge less or not at all." Learn what is and isn't negotiable and if it's possible get the carrier to lower or remove those charges.
  • Have a copy of the contract and the service guide. Lets take AT&T's ABN for example, the ABN service guide is the official guide for base rates. That along with your contract, which gives you discount amounts, will give you your effective rate. Without these pieces of information there is no way to validate the correct rates or discounts. If you don't have the contract and service guide or rate deck you can't effectively validate charges.
  • Maintain a list of employees (HR) and site locations (Facilities) so you can determine if the lines, trunks, circuits, devices, calling cards are being billed to current employees and active sites. While this seems like common sense we routinely find customers paying for former employees and closed sites so it must be more difficult than it seems.
  • Create and maintain a list of MRC's for fixed charges. If a cell phone plan assigned to John Doe is $69.99 or a MPLS loop and port is $456 then it's just that and no more. Keeping a list of the MRC's will help you quickly validate the charges.
  • Set a threshold for usage based services. If John Doe has a 3 month average for conference calling of $200 then maybe a plus/minus 10% threshold would be good. If your average long distance bill for a branch office is $3000 then maybe set the threshold to plus/minus 5%. What you're looking for here is an anomalies in usage and if you know what the average is and by what amount it varies it will make it much quicker to audit the invoice. You can set up formulas to do this, if you can get the data in a digital format. At Vocio we use OCR and scrape all of the data from paper invoices into our software, it then runs variance reports automatically. It flags amounts above or below your threshold so you can review the anomlaies but the others flow through to payment, so you only spend time reviewing questionable items and not the whole invoice.
  • Keep a lookout for third party charges ("cramming") that are potentially fraudulent. Some of the companies to look out for are Liberty Online, Venus Voicemail, National Online Services, Horizon and ILAB INET and ILD Teleservices to name a few. Many of these companies are legitimate but they use slick sales tactics and employees at branch or retail locations may iadvertently authorize their service charges. There are laws but the reality is these companies work in the gray area. This used to be isloated to local phone company bills, (they're required by regulations to bill on behalf of third parties) but more recently it's spread to wireless with companies like Nationwide Internet billing for supposedly free ringtones.

Of course in order to audit the invoice you need to store the data somewhere. For most companies that means Excel spreadsheets, and for most small companies auditing a handful of ten page invoices that is sufficient. However as the number of invoices grows Excel spreadsheets become very limited, they were never designed to be used in "real time" among a group of workers, which is what Finance and Telecom/IT departments need to do. Vocio was founded just for that reason, our software was designed to be used in "real time" by multiple departments, and to replace spreadsheets and manual data entry. Just as many other TEM providers were founded to serve Fortune 1000 companies Vocio was founded to serve the mid market enterprises.

Next I'll be sharing some tips and tricks on how to quickly get a credit or refund when you find a billing error.

Topics: cramming, telecom audit tips, telecom auditing tips, audit a phone bill, phone bill auditing

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