Evolve and Define Your Audit Process: First Step to Implementing a Cost-Assurance SaaS

The rewards of implementing a cost-assurance SaaS are twofold. You will not only capture more invoice errors, you’ll make the invoice review and audit process more efficient, typically driving 70 to 80 percent of your costs out of the process.

One client, who previously had an audit team of 15, is now completing the task with six people. Another client had two people processing monthly invoices over four weeks. Today, the same work is accomplished in less than one week.

By consistently applying the SaaS-driven process – month after month – you will make your analysts more productive. However, SaaS is not a magic bullet. It’s simply a tool. You will get out of SaaS what you put into it. That’s why it’s important to build your SaaS on a well thought out and cohesive cost-assurance process.

Today your current process will be either ad hoc or methodical; young or mature. The benefit of a SaaS implementation is that it forces you to take that current process – whatever state it’s in – and evolve it to the next level.

Now adopting SaaS won’t be easy: SaaS will force structure and discipline on the cost-assurance process. And some people may revolt against that discipline because it makes them walk through the invoice audit process in a very methodical and timely way.

But the upside is the CFO or cost assurance manager will fully understand what the invoice review process encompasses and how efficiently employees are working the process to validate invoices. The manager will see the status of each invoice, and this visibility will allow him or her to eliminate bottlenecks by adjusting the workload or finding out why certain invoices are taking too long to audit.

Getting Started

Prior to implementing a cost-assurance SaaS, your organization must first examine your current processes to learn how your staff is engaged.

Your objective may not be to fully replicate your current process in the SaaS, as your current process may not be optimal if it is bogged down in manual processes, scattered Excel worksheets, and/or other inefficiencies. So the key goal is to evolve the current process so that you can take full advantage of the automation a SaaS solution provides, in loading, validating the charges and managing how the invoice is handled, as it is processed. Luckily, your SaaS provider – having worked through this discovery process before with other clients – can help you shorten the time needed to review and adjust the flow of your current processes. At Contact Telecom, we begin this client process discovery phase by getting answers to the following key questions:

1. How are invoices received and tracked?
2. How is an invoice reviewed to validate the charges? 
3. What independent references are used to validate the charges?
4. What is the invoice workflow from receipt to A/P presentation?
5. How is the invoice auditing process controlled and managed?

These five questions should be answered with the goal of evolving today’s process to what it should be once the SaaS solution is in place. OK, let’s walk through each of these questions one by one.

How Are Invoices Received and Tracked?

This is a fundamental question that uncovers whether or not invoices are falling through the crack.

First off, is the cost-assurance team receiving all invoices? At many carriers, the accountant who logs the invoices into the accounting system is paying certain invoices before they are even seen by the cost-assurance team. Your objective here should be to identify each invoice, by vendor and current format. And for completeness, every invoice from every vendor should go through audit review.

How Are Invoices Reviewed to Validate the Charges?

In this step, you’ll define exactly what you expect analysts to do with each invoice, for instance:

• What sections of the invoice will they work on?
• Against what reference data are the invoice charges being compared?
• How is the analyst getting access to the data?

Your invoices will probably fall into standard accounting categories: recurring costs, non-recurring costs, usage, taxes, surcharges, and late payments, then adjustments and credits. Well, each of those sections has to be validated.

For instance, you can choose to route certain types or sections of invoices to different analysts with different skill sets, be they a resale, UNE, facilities, or tax specialist. If you want invoices routed by dollar amount, you can see to it that top managers see the big invoices only.

What Independent References Are Used to Validate the Charges

Another key step prior to SaaS implementation is to identify every source document or database, then explain how often the data needs to be updated and delivered to the user who needs it.

Reference sources include things like subscriber data, pricing/tariffs, contract terms, and industry databases such the LERG and NINA. At Contact Telecom, we often provide access to industry databases such as the LERG.

The flexibility of a good SaaS solution will accommodate all kinds of input diversity. But unless you document your reference data in detail, your final SaaS implementation will be missing some key ingredients.

What Is the Invoice Workflow From Receipt to A/P Presentation?

The next step is to determine the ideal workflow among the various business functions.

And here, telecoms vary a lot. Carrier A has no CFO; carrier B doesn’t have a separate dispute management team; and at Carrier C, accounting is part of provisioning.

What’s more, employees often don’t want to be pinned down as being responsible for any particular area. If three people are doing cost assurance, when you ask each of them what they do, they all point to each other.

Yet in the process discovery phase, you’re not trying to put a tag on any person’s head. In fact, you’re trying to do the opposite: Translate personal tasks into generic job titles and processes.

The end goal is to describe the process without naming any specific person. What you don’t want to hear is: “Oh, I get this data from Bill," because if Bill is out sick and nobody knows Bill’s spreadsheet password, you’ve hit a wall.

SaaS solutions such as our own BDA are highly customizable and can model just about any complex process you throw at it. For instance, you can customize the system so that invoices with a higher dollar value float to the top. And as the invoice goes through the different steps it can be handed off to different analysts; credits and adjustments by one analyst, inventory by another, new USOCs by a third, or one person can be assigned to work all exceptions as they arise. As the exceptions are cleared, the invoice is free to proceed forward.

The end result will be a consistent invoice workflow that guides the invoice through a series of checkpoints and manages the work as different business areas are assigned to work exceptions, from validating the invoice to routing claims to the dispute team and a final transaction record to the A/P group for payment and journal entry.

How Is the Auditing Process Controlled and Managed?

The final step in preparing for SaaS implementation is to wrap management controls around the whole process.

Here you’ll need to specify who gains access to the SaaS application and when.  Access by all of the business functions –- cost assurance, provisioning, accounts payable, marketing, etc. –- must all be defined and responsibilities assigned. Can people access the data from the Web or through a VPN? Who is the first contact if I have inventory questions? All of these issues need to be nailed down.

Once the right access controls and task assignments are in place, you can leverage expertise across your organization.  Maybe I’m at a certain point of an invoice audit and I need Bill, the facilities expert, to review criteria being applied. So I route it to Bill, who responds, “Oh yeah, in this invoice, parts 1 and 2 are good, but part 3 is in error and here’s why … "

Another aspect of good SaaS management and control is setting standards for how quickly tasks should be completed. In this way, you can efficiently moving the invoice along and ensure that it doesn’t sit in someone’s queue for very long, unseen. You can see where the invoice is stalled and hopefully there’s a note telling you why it’s delayed.

Will the SaaS make your auditors accountable? Again, the SaaS is a tool. A SaaS dashboard will quickly highlight who is working within the agreed process and to the benefit of the company. Accountability for getting your job done is the role of the cost assurance team manager.

However, a properly designed business process and SaaS implementation of that process will certainly unleash the power of collaboration in your organization, and drive a more efficient business environment. People will be empowered to work together as a team to get the job done.

Peter Yelle is a partner at Contact Telecom LLC. With more than 20 years of professional engineering and product management experience in the telecom and wireless industries, he has been instrumental in bringing effective telecom solutions to market.  Yelle holds a Bachelor of Science in Electrical Engineering from Northeastern University in Boston.