A strategic perspective on invoice-to-cash
Get a fresh perspective on improving the invoicing experience.
As featured on Energy Central…
When you think of innovation or differentiation, it’s safe to assume that billing and payments is not the first thing that comes to mind. For many, this last mile of invoice-to-cash is simply regarded as a monthly business operation. Customers purchase and consume services, bill cycles run, and payments are made and applied. But what happens when new competitors emerge and new consumption models alter the billing status quo? Digitally savvy commercial and industrial (C&I) customers demand more – not in product or price – but in visibility and convenience.
The energy market is facing an interesting crossroads. C&I customers have more options than ever before when it comes to how they consume and pay for their energy resources. Time of use, real time, variable peak, critical peak and rebates – all dynamic pricing models that give the customer more control. Same thing with smart meters. Instead of responding reactively at month end to usage totals, customers are empowered to monitor hourly or daily data and alter cost-impacting patterns immediately.
But with options comes complexity. These new ways of doing business all require new ways of engaging with the customer. Customers are buying in to these new models with the promise of driving efficiency – but efficiency only becomes reality when armed with the right data and tools. Many providers have made significant investments on their back-end billing operations to support these new consumption and rating models but the resulting customer billing experience has not received the same attention.
The risk? Improvements in customer satisfaction will quickly be cannibalized by customer frustration. Having the options available is one piece of the puzzle. But enabling C&I customers with the visibility and tools required to monitor data, review usage, validate charges, and process invoices tied to those new options – all in a convenient and efficient way – is the other piece of the puzzle.
The bigger risk? Frustrated customers in deregulated markets will begin looking for other options. And without the burden of legacy systems and processes, some of these new players are much more agile than long-standing incumbents.
This complex billing experience may be new territory for the energy market, but this is old hat for most of your business customers. Think of mobile telecom and data services. These large organizations have hundreds of accounts and thousands of service lines, all spread across different locations and different rate plans. The products and services have become a commodity. Now the goal is to be efficient as possible, which requires a keen view and understanding of how services are being consumed or not consumed. And ensuring accuracy of charges and allocations across sites. Sound familiar? The experience you deliver is not only being compared to others in the energy realm but providers that sit outside of your competitive radar.
So what digital invoicing functionality are C&I customers expecting from their usage-based service providers? Here are four capabilities that rank high for customer demand and adoption:
1. Single point of access to all invoices
Gone are the days of product, service, or location invoices being delivered individually. Customers want access to any or all invoices for the entire organization from one digital portal. Large organizations spend countless hours manually tracking down invoices and then re-keying data into a consistent format or hosting location. This not only causes frustration but opens the door to human error. These large businesses also note the importance of disseminating individual invoices – or data points from those invoices – to other stakeholders or systems.
2. Consolidated invoicing and reporting views
C&I customers don’t want to view static PDF invoices online. They want a true digital experience that allows them to dynamically change invoice views based on their specific needs or organization structure. This requires the aggregation and normalization of varying invoice data into a non-document based format. This allows for corporate-wide invoicing and reporting views that are based on how the customer operates versus how the supplier assumes they operate.
3. Detailed usage data coupled with analysis and alerting tools
Access to detailed data becomes critical when price is derived from consumption activity. Without this level of detail, trust is threatened and support teams are overburdened. This is a bit of a reverse from the summary billing movement, which aims at removing as many line items as possible to reduce the size of the paper bill. Don’t worry – customers don’t want the detail in document form. But they do want an easy way to access, analyze, and monitor the usage and fee data either in near real-time and/or on a monthly cadence. Additional needs are being driven to account for customer-produced energy (solar, wind, etc.) to accurately reflect buy-back and associated credits.
4. Integrated payments and automated remittance
Customers don’t want to pay their invoices based on their supplier’s accounts receivable (AR) structure – they want to pay them based on their accounts payable (AP) structure. And more times than not, this does not align and causes a major disconnect between invoices and payments. With the ability to consolidate invoices and associated payments online, manual payment remittance is replaced with a data structure that is kept intact and shared automatically when payment is submitted. Although this is often viewed as a benefit for the supplier’s AR, this also ranks high for customers due to the alternative AP manual processes and resulting errors.
There will always be variances but the foundation for what today’s business customer expects from a digital billing experience has been set. And more importantly, it’s been widely approved by the customers themselves.
Talk to your customers, talk to market leaders, and talk to others beyond your industry walls. A solution exists – it just needs to be applied.
Want more information? Click here for a full list of digital billing & payment features that are attributed to driving 90% digital billing adoption among large businesses.
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