A Simple Answer to “What Is Billing?”

In my last blog post I talked about what #sexybilling was, or perhaps more accurately , what it might look like. It became evident from the comments though that I hadn’t really made it clear what I thought billing was, and so that sort of complicated the story. If we don’t know what billing is, how are we going to know what sexy billing is?

So what do I take billing to be? Customer accounting. It’s that simple. That is billing is anything involved in providing accounting for your customers: the people, the processes, the information and the technologies. Billing therefore involves a large number of disparate capabilities including (but not limited to):

  • Calculating charges.
  • Invoicing customers.
  • Presenting bills (by whatever channel).
  • Figuring out how much customers owe you, and how much you owe customers.
  • Accepting and allocating payments.
  • Managing overdue amounts, collections and dunning processes.
  • Responding to queries about charges, invoices and balances.
  • Allowing or denying service based on balances.

There are a few capabilities that are grey areas. I would probably include them under billing, but others might not, such as revenue assurance and collections and dunning (though the closely related financial risk management might be stretching it a bit).

Under this formulation there are a number of things that  billing doesn’t include. It doesn’t include  corporate financial accounting, but would include providing information about customer accounting to corporate finance. It also doesn’t include wider business intelligence and analytics, but does cover providing information about customer accounting to such functions.

There are a couple of important points to note about the definition I’m using. Firstly it isn’t specific to telecommunications, it applies to any organisation that needs to keep track of customer accounting (though many will be so simple that this isn’t hard). Secondly, it does not focus on billing systems – it encompasses everything that goes into managing customer accounting.

I’m not claiming that my definition is perfect, but I believe that its simplicity allows us to focus on the important aspects of billing: the customer, and the accounting. And it sidesteps all of those distractions about whether something is or should be implemented in a billing system or a CRM system. I think that it passes the most important test of a definition: is it useful?

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