Invoice-to-contract analysis and invoice-to-inventory reconciliation are essential. Validating charges includes investigating amounts for accuracy and confirming they are associated with services known to be active and installed.
Financial management tracking can be grouped into two primary categories, cost recovery and cost avoidance, both of which return precious dollars to the telecom budget and avoid waste and overrun. Valuing the activities surrounding these objectives is a necessary function of justifying that they are needed. To that end, tracking financial return associated with cost recovery is critical.
Credits obtained for overpayment are relatively simple to track. The net amount of overcharges plus taxes, surcharges and fees assessed against them is the amount of the credit obtained. Penalties against the provider and interest may also contribute toward the total. Credits would not have been recovered if the errors had not been discovered.
The second factor when valuing financial errors is the amount of overcharges that would have occurred had they not been identified. The recurring value of the error represents preventative savings or cost avoidance. Therefore, overpayments of incorrect invoice charges are prevented through obtaining the initial credit and by the provider correcting the issue that created the overcharge.
Cost recovery values represent real dollars saved and cost avoidance values can be used to justify the need to pursue and perpetuate financial management activities.
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