Cloudmore Blog

The Big Cost of SaaS and IaaS Billing Mistakes

This week, two IT services companies contacted me looking for help with billing automation. Pressing for more information in my initial discovering meeting, each company (let’s call them Company A and Company B) confided that they had found mistakes in their monthly invoicing.  

Now, it can be tough to get customers to air their ‘dirty laundry’ in a first meeting, but Company A and B were keen to communicate the extent of the financial implication with me in order to work towards a solution. Here are their stories.

Company A: Expensive Services Offered for Free

Company A informed me that they had two separate billing challenges. First, they had a couple of customers who had not been invoiced for services they had been receiving for the last nine months. As embarrassing as it may be having to explain this to the customers, Company A was hoping it could get still get paid.

However, it was a second duo of customers, or to be precise, ex-customers, that were the bigger problem. Company A had, to its dismay, discovered that these two customers had left six months ago, still had services provisioned (and the vendor/supplier was being paid every month), but they were not invoicing them. What’s worse, there was no way to recover the money. Over the six-month period, these ex-customers had incurred costs of nearly €15,000 (US$17,000). Since Company A, as an intermediary, was making a 20% margin on this service, it would need to sell an extra €75,000 (US$85,000) just to recoup the cost. 

Company B: Under invoicing of US$34,000 per month

My conversations with Company B raised even larger alarms. Company B had discovered that they had not been charging customers for changes made since the initial services had been set up.

In their accounts system, they had applied a recurring contract for an initial amount. But as the support department had responded to requests to add (or reduce) quantities, the customers’ monthly invoices had not always been adjusted.

An audit identified under-invoicing equating to €30,000 (approx. US$34,000) per month! The offering was a combination of IaaS and SaaS services. Worried about their credibility, Company B was not willing to go back to the customers who had been promised “flexible Cloud pricing” to explain their errors.

Manual Processes Causing Inaccuracies and Slow-down

For both companies, completing the billing cycle was proving to be a strain, in terms of time and in terms of pressures on staff. Manual processes included lots of Excel work and a medley of emails between departments to make sure the correct quantities and pricing was being applied. Traditional manual systems such as this are understandably error prone. Both Company A and B promptly recognized that this old modus operandi could not support a recurring billing model, and this is why they approached Cloudmore.   

The Cloudmore Solution

Here is a step-by-step illustration of how Cloudmore can help remedy problems such as those described above by offering a streamlined, end-to-end solution that ensures that customers are billed correctly every month. 

Price Book

 

Cloudmore has a price list for each service. This can be managed globally for all customers, or can be changed for a specific customer. 

 

Quote

Use the Cloudmore quote tool. This tool will automatically update special pricing agreed with individual customers.

               

Provisioning

Provision the agreed services using Cloudmore, and they will automatically be added to the billing report with the correct quantities and pricing.

   

Adds, Moves and Changes

 

Support teams can use Cloudmore to make changes to quantities. The billing values will automatically be updated to reflect the new quantities, with the correct pricing.   

 Customer Self Service

 

Cloudmore will empower your customers to make adds, moves and changes themselves, plus they’ll be able to see the financial consequence (which will automatically be reflected in their bill). They will also be able to view full cost breakdowns for all their services, giving full transparency.

   

Supplier Cost Reconciliation

 

Cloudmore will help reconcile your supplier charges to ensure all active services are forwarded, invoiced, any cancelled services have been terminated, plus it will check for any supplier mistakes! 

 

Billing Automation

 

Integrate Cloudmore with your billing platform using our APIs, or export > import, to give you end-to-end, quote-to-billing automation. 

 

 Book a demo to learn how Cloudmore can help with your billing.

Posted by Dyfed Wallis on 05-Dec-2018 15:38:31


Sales Manager Cloudmore. Cloud evangelist with 20 years experience of helping companies use technology to become more profitable.

Find Dyfed Wallis on:

Cloud Billing, Billing & Pricing, Business processing, pricing