With our current hyper-connected society in which communication infrastructure plays an important role in the conduct of business, there has been an increasing nonrenewable dependence on telecom services. The companies spend much in relation to telecom services whether its communications phones, internet, conferencing or Unified Communications. Yet as telecom billing and services become more and more complex it can be a nightmare to manage telecom costs. This is where a Telecom Expense Audit can turn out to be a necessary tactical resource.
Telecom Expense Audit helps companies in identifying the billing inaccuracies and removing unnecessary expenses, confirm contract compliance and reduce the overall telecommunication expenditures. It is more than inspecting invoices; it gives an outline of long-term savings and improved efficiency.
So Just What is a Telecom Expense Audit?
Telecom Expense Audit refers to the process through which the telecommunications bills, contracts and services of an organization are reviewed and analyzed systematically to discern inaccuracies, inefficiencies and discover areas to reduce price. It entails confirmation of the accuracy of billing, utilization, service utilization in accordance to the contract and also in accordance with the business requirements.
Such audit may cover telecom services of all types which may include:
Landlines
On the go and wireless packages
Data and Internet services
VoIP, UCaaS cloud communications
Audio-Video conferencing and teamwork solutions
Intercontinental calling services
The importance of a Telecom Expense Audit: Why is a Telecom Expense Audit Important?
Telecom services can constitute a big chunk of the operation cost of a company. However, telecommunications bills are greatly complicated and mistakes do happen. Actually, according to an industry survey, billing errors could be found on up to 80 percent of the telecom bills with overcharges averaging about 7%-12 percent of overall expenditures.
The following are important reasons as to why a telecom expense audit is vital:
1. Cost Recovery
Other frequently uncovered errors through audits include duplicate charges, improperly rendered services and incorrectly charged rates. Lodging and challenging such charges can lead to big cost savings.
2. Cost Optimization
In addition to recapture of past over-payments, audits assist businesses in targeting its underused or unused services, and as a result allow businesses to reduce its waste, and renew contracts on the basis of its actual utilization patterns.
3. Improved Compliance
Auditing guarantees that the telecom vendors are keeping to the contract terms and service level agreements (SLAs). It makes them responsible and guarantees that your organization gets what it is paying.
4. Strategic Planning
When companies know their current usage and costs, they can be more efficient in their future telecom planning and determine whether they should scale their current services up or down, or upgrade technologies.
Important elements of a Telecom Expense audit
Any comprehensive Telecom Expense Audit has several elements, and all of them are pursuing the idea of better controlling expenses and enhancing the efficiency of operations. The most vital ones are shown below:
1. Reviewing and Verifying of Invoice
This is the base part where one is checking every line in a telecom invoice. The auditor Gold guarantees:
Proper pricing by contract terms
Usage accuracy
Unfairness of the entire charges
Eradication of services that are illegal or duplication of services
2. Contract Analysis
Auditors check all the telecom service contracts to see that the providers are following the rates, terms and conditions agreed upon. They also decide:
Termination clauses (rather early ones)
Renewal terms
Volume commitments
SLA adherence
3. Service Inventory Reconciliation
Perhaps the easiest type of waste to eliminate is paying money on services or lines that are not used anymore. By logging all telecom assets in their full list and matching it with the billing information, the auditors understand:
Not being used lines or circuits
Old-fashioned mobile devices
Duplicated internet, or voice The process of adding redundancy among the voice or internet services.
4. Analysis of Usage Pattern
Usage data is used to see whether that company is on the most economical plan. For example:
Are employees using more mobile data than the contract limit to pay extra charges?
Is a high rate charged on international calls without a need?
Are there workable collaborative tools?
5. Dispute Management
In the event that they identify discrepancies, the auditors assist the vendors to file objections and refund overcharges. This is done in the following method:
Results recording
Vendor communication
Refunds or credit negotiating
Advantages of Telecom Expense Audit
Telecom expense audit comes with both short-term and long-term value, which includes:
1. Cost Savings
Companies have been known to cut down on their telecom bills by 10% to 30 percent of the entire telco spend after their audit. This saving can then be transferred to any other area in business which is deemed important.
2. Greater Visibility
Audit will give a clear picture of telecommunication usage and expenditure in different departments or schemes, which will allow us to plan the budget and accountability better.
3. Better handling of Vendors
Audits make sure that vendors are responsible in regards to billing and fulfilling contracts. This may work in enhancing relationships with the vendor and make a better stitch in future negotiations.
4. Increased Operational Performance
By cutting non-effective activities, cutting down (or even eliminating) those services that are not essential and simplifying the billing processes, businesses are able to work smoother.
5. Improved Governance and control
Proper documentation of the audit procedure improves internal control and minimizes development of financial leakages through telecom overspending.
When to do a Telecom Expense Audit?
Although a one-time audit is capable of identifying past revenue billing mistakes and savings, the telecom expenses do not remain constant. The pricing models provided by the providers are often altered and the needs of the company alter with time. This is the reason why we have a lot of organizations carrying out audits:
Regularly to conduct cost checks once a year
Every three months in high growth or big businesses
Unification of telecom platforms through post-merger/acquisition
Closer to milestone contract renewals of major technology upgrades
Other companies prefer to deploy Telecom Expense Management (TEM) systems which come with continuous auditing that is done in an automated manner.
Who ought to do the Audit?
Telecom Expense Audits may be carried out:
1. Internally
Provided a company has its own strong IT or finance department capable of auditing people with telecom experience, they can audit themselves. This however demands:
Great understanding of telecom billing models
Information and vendor portal access.
Time and human factors.
2. Externally
Third Party telecom firm TEM is involved with a lot of organizations. These professionals can perform the extensive audit within a short time and efficiently with the tools, expertise, and relationships with vendors.
Conclusion
The TEAs are not a cost management game but rather a strategic role, which led to financial accuracy, efficiency in operations, and an improvement in vendor management. Telecom environments are getting increasingly complicated due to the introduction of 5G, cloud services, and remote working infrastructure, which is why it is necessary to conduct regular audits in order to control the situation.
When done either internally or through a professional third-party company, a properly conducted Telecom Expense audit has the potential to save organizations a considerable amount and manage to make their telecom investment reflect real business requirements. This advantage is what it takes in a competitive market place.
FAQS
1. So what is the Telecom Expense Audit aimed at accomplishing?
Telecom Expense Audit is a program that is aimed at allowing organizations to determine whether there is any inaccuracy in the performance of invoicing, there is no need for spurious telecommunication services and that performances are according to the agreement of the vendor. The ultimate aim includes limiting telecom spending, enhancing monetary precision and optimum utilization of telecom resources. Overcharges as well as inactive lines and unutilized services that are subject to cancellation or renegotiation savings are discovered on a regular basis in audits.
2. What is the range of savings that a company can have through Telecom Expense Audits?
The savings depend on the size of the firm and the complexity of telecom provisions but on average 10 to 30 percent of telecom outlay can be reclaimed by business after reviewing the situation using an effective audit. Depending on the situation, particularly in the instances where the expenses of telecom costs have been allowed uncontrolled for many years, it is possible that savings will be even higher because of billing mistakes or the obsolete services which are still being charged.
3. So how frequently should we carry out a Telecom Audit?
Telecom Expense Audit should be performed every year in order to maintain the accuracy of the bills and cost management. Nonetheless, the reviews can be conducted more often e.g. every quarter or semi-annually would suit enterprises or organizations that are larger or are on the fast-track in regards to telecom utilization, restructuring and/or reforms.
4. Is it possible to make Telecom Expense Audit in-house or should we employ a professional?
An in-house audit will be possible when your staff possesses the skills in telecom billing, contract and service management. But some prefer to use third-party companies that do audits or Telecom Expense Management (TEM) providers because they are suppliers of specific tools, industry benchmarks, and experience of negotiating with vendors that can result in quicker and more successful outcomes.
5. What occurred once the audit has been done?
Once Telecom Expense Audit is finalized, you are provided with a list of the areas that you have been overcharged, discrepancies, and optimization opportunities. The following usually involve:
Arguing against false charges to suppliers.
Cancelation / consolidation of unnecessary services
Depending and making adjustments according to usage
Renegotiating contracts
Putting in place any monitoring or TEM tools
Internal telecom expense review processes are also developed in many organizations to be conducted on a regular basis in future.
