E-billing – as Part of the MBA in Credit Management
As a leader in the e-billing space, we were recently asked to contribute to course materials for a module on e-billing, as part of a larger MBA in Credit Management. It’s an honor to help shape the academic understanding of such an important field.
The MBA materials we have created address Philosophy, Policy and Process considerations for e-billing, as well as presenting a case study on e-billing for real-life context.
So, where does one start when learning about e-billing? With a firm grasp of the ‘why’ to e-billing; the philosophy underpinning it. We broke this philosophy down into sections, starting with challenges faced when using traditional billing. e-billing arose as advances in technology offered a route to tackle these challenges, evolving in sympathy with buyers’ needs and a range of internal drivers.
E-billing Philosophy
From a philosophical perspective, e-billing exists to support the accounts receivable team’s need to bring cash into the business quickly and efficiently. This needs to be carefully balanced against the demands on a seller to invoice, or bill, in a way that suits buyers. In a world where customer loyalty is low, and businesses face growing competition, it pays to adapt billing to meet buyers’ needs.
We also explain, in light of customer experience management, how businesses need to view billing as part of their brand connection with customers, considering the ramifications of how all aspects of their billing process influence existing and potential customers.
Overall, e-billing philosophy is about supporting the needs of the business directly through improving cashflow, insight and enhancing Accounts Receivable efficiency, and indirectly through the ability to better meet customers’ needs and expectations, whilst improving customer experience and perception of the brand.
E-billing Policy
Once the philosophy behind e-billing is understood, this can be put into context via principles set out in an e-billing policy. Policies need to evolve over time, adapting to external factors but driven by internal stakeholders who have a firm grasp of the e-billing philosophy.
E-billing policy should encompass communications, formatting, standards, integration, administration and risk management policies.
Policy ultimately drives process, so establishing a detailed and extensive e-billing policy makes it easier to develop effective e-billing processes that deliver on the overarching philosophy.
The communication policy should set out whether push or pull e-billing processes are emphasized for e-billing communications, and what options are available for each of these. Formatting and standards policy outlines which standards are adhered to and formatting considerations relating to these. It should also outline how future standards and formatting requirements will be incorporated and how legal requirements, such as EU Directive 2014/55/EU are supported.
Integration policy provides the business with guidance on how all aspects of integration with external data sources and accounts payable systems, or VANs, needs to be undertaken. This policy drives the creation of individual processes for each integration requirement.
Administration policy for e-billing should outline administration hierarchy within the business, including workflow for all aspects of communication creation, reporting, action on exceptions and escalation pathways. Policy should be designed to streamline responsibilities and access, providing the greatest overview with the least complexity for the most senior roles. Administration policy should also take into account the option for handing-off to outsourced partners for faster resolution of issues, where appropriate.
Finally, risk management policy ensures risk is managed appropriately throughout the e-billing process. Risk management will be shaped by a combination of factors, including the organization’s philosophy or appetite for risk, the industry they trade in, the mix of customers, margin achieved and both internal and external risks to security.
E-billing Process
The e-billing Process is the manifestation of associated policy, reflecting the organization’s e-billing philosophy, through specific tasks and routines. Documentation of the e-billing process is required to ensure tasks adhere to the agreed policy.
The e-billing process is made up of a number of process areas, each defining tasks relevant to their area. The overarching process documentation presents a management-level view of how policies are applied to deliver on the e-billing philosophy of the business.
The e-billing process should encompass the following aspects:
- E-billing Production Process
- Distribution and Communication Process
- Payment Handling Process
- Reporting Process
- Escalation and Dispute Resolution Process
- Management and Process Automation
To ensure e-billing success, processes must be reviewed and refined by their process owners – utilizing insight from reporting and reflection on how we the process implements policy and supports the overarching philosophy. Processes should evolve over time and may even feed back into policy review.
E-billing isn’t just academic
As a leading supplier of outsourced e-billing services, we put all of the above academic considerations into practice on a daily basis. Approaching e-billing with a thought to philosophy first, policy second and process third, ensures completeness and delivers e-billing success more quickly and consistently than jumping straight into process application.
Not everyone has the time or resources to study for an MBA and become familiar with the detail around these points, but outsourcing your e-billing requirements to Corcentric provides you with the assurance that the approach will follow this best practice.