Billing System Costs

Billing system costs include the initial hardware, software costs of the system along with the operational costs such as invoice processing, bill printing and mailing, intermediary clearing house settlement companies, customer care (call centers), and collection services.

Hardware and Software

The hardware usually includes high performance computers that operate proprietary software. Due to the complexity of hardware and software billing systems, continuous training operations support may be required to ensure quality services to the customers and to provide revenue assurance.

Invoice Processing (Batching)

Periodically, billing records are gathered for invoicing. If a company has many customers, they may be divided into cycles (or “billing cycles.”) The billing cycles are different for groups of customers. This allows the billing system to only batch a portion of the billing records each time. These billing records must be forwarded for delivery (to a bill printer or for electronic distribution).

Bill Printing and Mailing

In most cases, invoice records are sent to a bill printer or they may be sent by email or printed by the customer when the payment is made online. When bills are sent to the printer and mailing house, this usually costs between $1-$3 per bill. Sending bills by email helps to reduce the cost of providing the customers with bills and receipts.

Call Center

A call center is a place where calls are answered and originated, typically between a company and a customer. Call centers assist customers with requests for new service activation and help with product features and services. A call center usually has many stations for call center agents that communicate with customers. When call agents assist customers, they are typically called customer service representatives (CSRs).

Call centers use telephone systems that usually include sophisticated automatic call distribution (ACD) systems and computer telephony integration (CTI) systems. ACD systems route the incoming calls to the correct (qualified) customer service representative (CSR). CTI systems link the telephone calls to the accounting databases to allow the CSR to see the account history (usually producing a “screen-pop” of information).

Call center telephone systems can cost over $3,000 per CSR station. The average telecommunications service provider has 1-2 CSRs for every 10,000 customers. This results in an average customer care call costing $7-$10 per call.

Figure 1 shows a typical call center. This diagram shows that calls may be received or originated from the call center. The customer traditionally communicates with the call center by telephone. When a call is received by a call center, the user is typically provides with a list of options by an automated interactive voice response (IVR) unit. As the user selects from the list of options, an ACD system routes the call to a CSR station that is qualified to assist the customer (e.g. sales agent or technician). When the CSR agent answers the call, some of the customer’s account information may become available on the CSR’s computer screen (“screen pop”). The CSR will communicate with the customers and should make notes in the customer’s account regarding the activity that progressed.

Figure 1: Call Center


Collections are activities that a service provider performs to receive money from their customers. Ideally, all customers will receive their bills and pay promptly. Unfortunately, not all customers pay their bills and service providers must have a progressive collection process in the event a customer does not pay their bill.

When customers are first added to a system, they are rated on the probability that they will pay their bills. This is accomplished by using information on their application and reviewing the credit history as provided by an independent credit reporting agency.

The collection process for delinquent customers usually starts by sending a reminder messages to the customer be mail or recorded audio message. If initial attempts to collect are unsuccessful, more aggressive collection activities will progress that include restricted calling, service disconnection and sending or selling the uncollected invoice to a collection service.

A restricted calling class that forces a telephone (usually a wireless telephone) to be connected to an operator regardless of the digits actually dialed. Hotline is typically used when a telephone is first sold or activated to allow activation after the customer has provided the information to register for service or when the customer has not paid their bill.

If all attempts to collect from a customer have failed, a service provider may write off the uncollected revenue as bad debt, retain a collection agency or sell the uncollected invoice(s) to a collection service. If the account is written off as bad debt, the customer’s information is usually placed in a negative file to avoid reactivation and their poor payment history is reported to a credit reporting agency. Various collection companies (collection agencies) offer collection services that work on a percentage of collected revenue. Some collection companies will pay for uncollected invoices. When uncollected invoices are sold to collection services, the service provider is usually prohibited from working with the customer in the future regarding payment on the account.

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