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The Big Cost of SaaS and IaaS Billing Mistakes

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

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 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 these companies 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 was going to be to have to explain this to each client, Company A was hoping it could get still get paid.

However, Company A also had a second set of customers, now ex-customers, that were the bigger problem.

These two customers had left six months ago, still had services provisioned (and the vendor/supplier was being paid every month), but the customers weren't being invoiced. 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 their 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 hadn't 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 continuous back and forth between departments to make sure the correct quantities and pricing was being applied,  leaving the door wide open to error. Both Company A and B  recognized that this old method of doing things couldn't  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 fix problems like 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

 

You can also enable your customers to add and make changes to their subscriptions themselves, plus they’ll be able to see the financial consequence which will automatically be reflected in their bill. Customers can also view full cost breakdowns for all of their services from a customized dashboard, giving full them transparency.

   Supplier Cost Reconciliation

Cloudmore will help reconcile your supplier charges to ensure all active services are forward 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 get end-to-end, quote-to-billing automation. 

 

For further information download our CSP Guide or watch our Win with CSP Automation webinar

Topics:Cloud BillingpricingBilling & PricingBusiness processing

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