chapter - 25 revenue assurance · 2018-05-08 · revenue assurance (ra) is a business activity most...

E4-E5 Core Rev. Date: 31-03-2016

©BSNL, India For Internal Circulation Only 1

Chapter - 25

Revenue Assurance



Revenue Assurance

Revenue assurance is a process to verify the beginning to end completeness,

accuracy and integrity of the capture, recording, billing and reporting of all

the revenue producing events from customer order entry through collection.

Deloitte&Touche,2001

Revenue Assurance (RA) is a business activity most commonly undertaken within

businesses that provide telecommunication services’. But Revenue Assurance activity is also

found in use in many service organisations like hospitals, Insurance companies, and Banks. In

fact, it is a common feature of business management for small business units operating in Service Industries.

Revenue Assurance can also be described as a method of risk management. It is a

method by which the management will try and prevent or reduce the risk of leakage of revenues in the revenue cycle to get maximum benefit of Revenue generation efforts.

Revenue Assurance in Telecom Industry is the process of ensuring that a

communication service provider is billing and collecting revenue appropriate to the sales and usage of the provider’s products and services.

We know that when the operations are happening in a small scale the proprietors may

be able to keep track of all operations and ensure that efforts of the organisation is fully utilized in revenue Generation. But when the size of the organisation grows up and operations

spread to wider area and become complex due to number of variables increasing, it may keep

a close track of revenue generation activity. Many activities may still be performed sincerely,

but may not result in revenue Generation. There may be many Revenue leakages and frauds which may be taking place parallely and go un noticed . Revenue generation activities may

not be yielding full results and may be performing below its expected level. In such

situations, the function of Revenue Assurance acquires relevance at that stage to detect and

check operational underperformance.



To get full understanding of Revenue Assurance one has to seek answers to the following

questions.

1.How well are the resources made available to the organization are utilized in Revenue generation?

2.How accurately the utilization has been recorded?

3. Has all the utilization been converted into saleable products?

4.Have all the available saleable products been sold at proper prices. 5. Have all the deliveries been invoiced properly and correctly as per rates agreed with

customers?

6.Have all customer complaints regarding product price and quality been attended to in time

ensuring customer satisfaction? 7.Have all the invoices been collected and converted into revenues and cash balances?

Revenue Assurance tries to answer questions of this nature to ensure that all revenue leakages

are closed and such Revenue Generation methods are improved from time to time.

Price water house Coopers (PwC) states that Companies operating in a competitive service

sector like Telecommunications, where the technological developments and introduction of

new services products are happening so fast that the companies are finding it exceedingly difficult to ensure that revenue generation efforts are yielding full result since there is a

possibility of revenue leakages and fraud denying managements full revenues out of their

efforts. They are finding it necessary to have Revenue Assurance as an independent Activity

in their organizations. This is more so because today’s billing and collection work involves different revenue generating products, Revenue sharing arrangements and bundled & tiered

product offerings and huge customer base as well as huge volumes of transactions.

Few companies have the sophisticated and well-integrated billing systems to support these new arrangements, but many service-oriented industries are found lacking in this area. The

work of billing and collecting dues has to be done without putting undue pressure on

customers for revenue generation as such pressures may be counterproductive if regular

customer feels cheated and unhappy, since customer loyalty and retention is paramount importance to the business, especially in the service industry.

Importance of Revenue Assurance The rationale for why revenue assurance has come to be considered important in

telecommunications, unlike other industries, can be understood from following factors which

have contributed for huge revenue losses for telecom companies:

A. Fast pace of change and intense commercial competition/ increased the likelihood of

mistakes in Revenue Generation,

B. Great Complexity in Systems and processes have been used increasingly to determine the combined effect of interactions with customers and suppliers.

C. Voluminous (Very High In fact) transactions, that too mostly of low value per transaction,

giving an impression of small financial errors.



D. Saturation in Markets for further fast growth necessitating companies to look for

maximization of revenues not from expansion but from capping the revenue leaks. As markets are reaching saturation and growth potential decreasing, the need for maximization

of returns from existing sales has increased.

Revenue Assurance is a part of the Business Intelligence, which is required to run companies

smoothly. The business Intelligence consists of 4 parts, known as quadrants and revenue assurance is one of these quadrants.

The details of Four Quadrants and their components are as given below: 1. Customer Assurance starts the whole process.

Customer order booking has to be done carefully noting specific requirements of the customer and matching the available resources or arranging the additional resources.

Mismatch can cause customer dissatisfaction later.

Customer Order Execution in the form of providing services based on the requirements of the Customers, so that customers are kept happy. No doubt “exceed the expectations “ is the

Marketing Maxim, at least fulfilling the requirements to the satisfaction of customers will not

lead to customer complaints.

Customer Order Management talks of Customer Relation Management. This includes

management the customers call facility and customer complaint redressal.

2. Business Assurance Business Assurance manages risk whilst leveraging organisation, technology and operations to enable sustainable business growth, performance and

profitability.

Financial Analysis dealing with the analysis of expected revenue generation due to execution of customer orders and the costs being incurred in executing those orders and, this

Financial analysis may lead to rejecting the customer orders (Unprofitable Jobs) or accepting

such orders with or without modifications in price. Modification in price will be attempted, if

customer wants the job to done on ‘cost plus basis ‘. If order has to be accepted, the possible readjustments of costs (Input costs) will be done.

Cash Management aspect of Business Assurance deals with keeping track of collecting the

receivables due from customers and managing the cash and ensuring availability of sufficient cash resources for the organisation to execute the customer orders as such an event – failure

to execute customer orders due to non-availability of Cash resources, will have serious

business repercussions for future Business.

3. Revenue Assurance as a last quadrant deals with

Billing is an important activity since it results in defining the income for the organisation and

cost for the customer. We have already seen in our study of revenue leakage, that billing should be done as per the contract with customer and only for the products/services actually

delivered to the Customer. Billing should also be done in time to ensure that the revenue

recorded is actually collected in cash and is brought back into working capital cycle.

Usage aspect of Revenue Assurance ensures that Actual usage of our services are recorded

properly and similarly the usages of input services from others are billed to us. Services used

by the customer only should be the basis for billing the customers. Any errors in recording

the usages will lead to avoidable customer dis-satisfaction, which leads to lowering of



demand for products. Similarly, continuing the services after termination of the contract by

customer will result in wasteful activity, since such usage cannot be billed to customer.

Collection of bills raised is normally part of Accounts Receivable Management, but once

revenue assurance is initiated in the organisation, supervision of such function will come

under the umbrella of Revenue Assurance. This activity will involve offering clarifications in the billing activities on the points raised by the customers and amending charges wherever

necessary by issue of credit notes or adjustment of excess charges in next billing etc.

Revenue Assurance as we have seen so far will be inter-connecting the activities of the following main wings / functions of the service provider as far as checking Revenue

Generation and Revenue Leakages are concerned:

1.Marketing 2.Finance

3.Quality and

4.Information technology.

Revenue Assurance basically revolves around answers to these three basic questions:

Are we capturing all billable events?

Are we billing for all billable events accurately?

Are we collecting all the billed amounts?

Are we capturing all billable events?

The billable events represent the services rendered and utilized by the customers. The

important aspect here is to assure that the organisation captures all such events for billing and

realization without any leakage. Some of the most important areas of concern to be addressed

are enumerated as under:

1. INPUTS for Master Data: Whether the inputs for master creation are received

properly and promptly from the commercial and exchange authorities.

2. MASTER creation: Non Billing due to non creation or updation of master in

system even though the connection has been put through and customer has enjoyed

the services.

3. Transaction Data : Whether the fortnightly records of calls, Trunk call tickets

etc are properly and promptly received from the exchanges and completely captured

in the TR computer system and any cases of Short Billing of Local Call Charges,

Rental, Trunk Calls etc due to non receipt or delayed receipt of inputs from sources.



4. INPUT OF TRANSACTION DATA: - Whether the transaction data (Local

calls, Trunk calls, International calls etc)is promptly and correctly input into the

system.

5. PROCESSING ERRORS, IF ANY : Specially for new services, modifications

in existing services, Tariffs, shifts, etc

6. ANNUAL ITEMS :- Non Billing of non directory items such as accessories

etc

Some of the precautions to be taken for Revenue Assurance are as follows:

An integrated online system of billing commencing from service provisioning is a

must for error free and accurate billing.

Where manual system is followed, ensure that -

The completed copies of Advice Notes are received in computer centre within 3

days of work completion.

Completed copies of Advice Notes are not kept pending or sent in bulk after

accumulation. These are to be sent immediately after provision of service.

The feeding of Data to the system is accurate, proper and prompt.

Reconciliation is done for the missing Advice Notes through periodical meeting

with field officers.

Wherever events like area transfers, number changes occur, the same is updated in

the system smoothly and accurately in time.

All the error reports after inputting MR are invariably extracted and attended to by

the concerned TR personnel.

Periodical / Monthly Checks Required:-

Scan through reports for any abnormal calls - due to wrong full-round completion

etc by developing suitable, discrete selection criteria and comparison with past data.

Scan high and low statements and zero call statements carefully

In the case of STD PCOs, especially where there are significantly low calls,

compare the same with past records of billing and, where necessary, enquire with

exchange officers.



Reconciliation of MCUs generated and billed. The periodical instructions from

Corporate Office on the subject and the Audit comments / paras must be complied

with.

Ensure monitoring Mechanism to check the receipt of inputs regarding Inland Trunk

Calls from TAX in time for billing as per schedule.

Ensure monitoring of receipt of inputs regarding International Calls from the units

concerned as the amount involved is more in such calls.

Reconcile the figures of the number of tickets as well as amount and acknowledge

to the unit sending the inputs so as to ensure that there is no missing link in transit.

Scan through the cases where the rental is Zero.

Verify cases for where rentals are more than for Two months/One month (billing

period) as the case may be

Compare the total rental charges for the earlier period with reference to the No. of

line now billed.

Arrange to get the physical verification report from field units on prescribed dates,

regarding non directory items and verify with master.

Leased Lines and Net works: In view of increased demand for bandwidth, number

of leased lines is being provided. It is essential to keep an accurate data base in

manual/computerized format to ensure accuracy of billing and to avoid leakage of

revenue

Collection:

Departmental CCB PCOs:

Accounting for the difference between the coins collected and the metered calls in respect of

unmanned public Telephones.

With the new kind of instruments, there should not be any significant variation in the

collection. However, such variations must be taken up with the exchange authorities. A



constant monitoring mechanism will ensure (i) Collection Efficiency and, (ii) Shifting

of PCOs to better remunerative locations for full utilization, where required.

Collection as per Accounts and as per Sub-ledger

The reconciliation of sundry Debtors as per Trial Balance and Sub-ledger will throw light on

the accuracy or otherwise of the Sundry debtors balance as on date. Unless Sub-ledger

Collection figures are reconciled with Trial Balance figures the accuracy and authenticity of

collection can not be ensured. Every item in the sub-ledger must be supported by an agreed

list in the subsidiary registers and must also agree with the trial balance.

Reconciliation of Deposits: Non reconciliation of deposits and not keeping correct records

may lead to wrong refunds, wrong adjustments and erosion of revenue on the one side and

customer dissatisfaction on the other side.

Cheque dishonour Cases:

The cheque dishonour cases if delayed - in getting intimation from bank to AO (cash), from

AO Cash to AOTR, and AOTR contacting subscriber etc valuable time is lost in realization

and chances of customer becoming a defaulter increases. This cycle of efforts must be

monitored and speeded up.

Prepaid Cards--

Reconcile the accounts of prepaid cards both basic and cellular -- India Card and Excel.

Mobile Services:

Areas for revenue Assurance in respect of CMTS are

Overall prepaid calls reconciliation

IMSI mismatch

Zero duration CDRs

Prepaid trigger failure

MOUs reconciliation/CDR reconciliation

CUG access mismatch within the billing system

PSTN reconciliation



Incorrect PSTN pulse settings

Incomplete commands sent to switch

Physical control over Test SIMS

Monitoring usage of test SIMS

Direct update switch

Delay in receipt of TAP Ins

Subscriber deposit waivers

Inaccurate service settings

High float for subscription bounce cases

ADC claims for calls not routed through BSN network

Delay in verification of credit control

No auto disconnect

No effective threshold activation

No deposit reconciliation

No sundry debtor reconciliation

First bill delinquents

Verification subscriptions/CVs

Other Techno-Commercial-Financial areas of revenue assurance are:

Tallying of Total calls generated with the total calls for which the actual amount is

collected

Reconciling metered calls as per local exchanges and the TAX

Reconciling billable DELs in different systems

Monitor TAX/Call conversion efficiency

Continuity of meter readings - Ensuring Fault control-Frequency and duration-

Asset utilization-Loading

Beware of first bill outstandings

Any time billing

Revenue opportunity lost- Explore new or expand by exploring the untapped demand

like rural market.

Access to secret codes of recharge coupons


©BSNL, India For Internal Circulation Only

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Instructions from Corporate Office:

Statutory Audit observations and the Draft Audit paragraphs of P&T Audit as also the

C&AG’s Report forming part of BSNL annual report point out losses of revenue in BSNL

(earlier, DOT) due to certain generic irregularities. These cases mainly pertain to non billing

or short billing. The audits have also pointed out some of the instructions already available

but not adhered to by different Units. It is necessary that the precautionary measures

prescribed in the instructions of corporate office are followed scrupulously to avoid non-

billing and short billing. Also, as and when, objections are pointed out by Audit,

IMMEDIATE STEPS should be taken to bill them and COLLECT THEM before they

become AUDIT PARAS etc. This ensures better collection.

CAO level officers and their AOs must take all steps to tighten the internal controls and

update the knowledge of rules and instructions, enhance the skill-set and improve the

motivation levels of TR personnel. A skilled and motivated employee is the best guarantee to

prevent all leakages of revenues and all errors, omissions and irregularities from taking place.

It is necessary for the AOs/CAOs to update the knowledge of their subordinate staff, which,

by itself, is one of the measures for enhancing motivational levels.

Some important rules and instructions are summarized below under suitable headings.

1. Receipt of Completed Advice Notes by TRAOs

As per paragraph 60 (ii) of the Telecom Manual Volume XII (Part-I),

a) The Engineering/ Commercial units of SSAs need to forward the Advice Notes

(A/N’s) to Telecom Revenue Accounting Offices (TRAOs) very promptly and

in any case, within a week of the event for which the Advice note is issued.

b) Every issuing officer needs to send to the TRA Branch on the 7th of each month,

a consolidated statement showing the particulars of all the A/N’s issued up to

the end of the preceding month.

c) Any failure to recover rent for the subsequent periods owing to late receipt or

non-submission of Advice Notes reflects on the units not forwarding the advice



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notes. Such units must be instructed promptly. Repeated failures of any Unit

must necessarily be brought to the notice of the superiors of those Units.

d) Accounts Officers (TR) have to maintain a register (ACE-90) to watch serial-

wise and timely receipt of A/N’s, and bring any cases involving inordinate

delays to the notice of the SSA-heads for remedial action.

These rules are periodically reiterated by the Corporate Office a need to be implemented in

all seriousness.

2. Action by AO (TR) on Completed Advice Notes

After receipt of the completed Advice Notes by the TR branch, the TR brancmust ensure their

prompt and correct posting in the Subscriber Record Cards i.e., in the Subscriber Master

Files in the computerized setup. All steps must be taken to prevent wrong / delayed / non

–billing after receipt of the A/Ns.

CAO TRs need to review the posting of the A/Ns periodically to detect and prevent lacunae

therein.

3. Spare Telephone Numbers in Exchanges

The officer in-charge of each telephone exchange is required to keep a detailed record of

each telephone number with regard to its date of opening, shifting and closure with the

subscriber's address and also about its remaining spare/unused for specific periods.

Billing and accounting of calls recorded against the spare numbers and appearing in the

meter reading statements, was introduced ,vide DOT vide No. 2-27/85-TR, dated the 16th May

1985.



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Subsequently, vide No.23-64/90-TR/KW dated 1.7.91, DOT had also prescribed:

That meter readings of spare numbers be checked 100% by the AE in-charge of

each exchange and 10% by the concerned TDE;

That each MR Statement carry a certificate to this effect;

That this certificate be checked by AOTR before billing, etc.

The DOT reiterated these instructions vide No.2-90/96-TR dated 29.10.96, and wanted that

action be taken to prevent misuse of spare numbers. Further, BSNL Corporate office, vide lr

No. 2-38/2002-BSNL (TR) dated the 29th January 2003, not only emphasized strict

compliance of the above-mentioned instructions, but also recommended incorporating

suitable remedial measures in existing billing software solutions.

4. Internal Review of SRC's

Paragraphs 396 to 405 of the Telecom Manual, Volume XIV prescribe a regular review of

the Subscribers’ Record Cards (or, Subscriber Master File records) in each unit (SSA). This

is an important item of work meant to ensure that the basic billing records are proper

and accurate. This item of work must be attended to by ALL TR UNITS.

5. Periodic Verification of Telecom Facilities

As per paragraph 46 B of the Telecom Manual, Volume X, physical verification of the

accessories and other facilities provided to subscribers has to be carried out annually and the

exchanges are required to furnish a list of non-directory items to the concerned TRAOs every

year for verification of the Subscribers Record Cards (or, Subscriber Master File).

CAOs TR will need to coordinate with engineering officers well in advance to set in

motion the compliance with this instruction every year.



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6. Incorrect/Non-implementation of Tariff or Terms & Conditions of

Agreements

In these days of tough competition, tariff changes, changes in plans, changes in other

conditions etc are likely to be frequent. Some may be specific to specific SSAs or specific

set of subscribers.

All SSAs must maintain a Tariff Order Register, and submit implementation certificate of

every revised tariff order to the GMs TR or GMs Finance as the case may be, vide BSML

order No.2-14/99-BSNL/TR dated 23rd August 2002.

Some revenue leakages and consequent Audit paragraphs have arisen because the provisions

of revenue-related Agreements entered into between BSNL and private parties/ Service

Providers, or the BSNL’s discount policy for bulk customers, were either not followed or

not properly applied by some field units. By following the usual system of checks and

balances, and by systematically subjecting the more important Agreements or cases to a

detailed scrutiny by C AOs TR and Internal Audit the incidence as well as impact of such

adverse instances can be minimized.

7. Revision Rent on Actual Cost for Facilities on R&G Basis

As per instructions issued in partial modification of the provisions of paragraph 195 of

Telecom Manual Vol. XII (Part-I), etc., in all R&G cases final rental should normally be

quoted before commissioning the service. In the few unavoidable circumstances

where this cannot be done, the rental should be quoted as provisional, and the final rental

should be quoted within one year of commissioning the service. Hiring contracts should be

obtained in all cases and these stipulations suitably incorporated therein.

NW Branch of Corporate office had also advised the Circles (No. 26-92/97-NW/DAP/J&K

dated 24.04.02) to ensure that firm demand is obtained and R&G terms got accepted

before providing telecom services on R&G basis.



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8. Compliance with Service Tax Laws

It must be ensured that the billing software in use in each SSA has due provision to

charge Service Tax on the value of taxable service rendered and to account for the

collection actually made. All instructions from time to time from the Government regarding

collection and remittance of service tax must be implemented in the billing softwares

carefully and promptly. Prompt remittance of collected tax on the due dates prescribed and in

the manner prescribed from time to time is also equally important.

9. Timely Disconnection of Telephone for Unpaid Bills

As per existing guidelines, a defaulter’s telephone should be disconnected on the 35 th day

from the date of issue of the bill. (Exception: Bills to STD/ISD-PCO operators are issued on

fortnightly or weekly basis, and they must pay the same within four working days or face

immediate disconnection)

AOs TR must ensure the timely and proper receipt of disconnection lists by Exchanges.

Exchanges must in turn ensure prompt disconnections as per the list. It is a matter of serious

concern that telephone facilities of defaulters, sometimes even PCO operators, are allowed in

some SSAs to continue for months beyond the prescribed date of disconnection.

AOs / CAO TRs must review all such cases and bring the failures to the notice of proper

higher authorities. These may also be placed in management meetings – as these are of

serious nature. As per the instructions issued under BSNL lr. no. 2-39/2002-BSNL-TR dated

the 6th January 2003, and No.2-41/2002- TR (BSNL) dated 14.2.2003, timely

disconnection of telephones may be monitored through monthly Management Meetings at

Circle HQs.



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10. Display of Arrears of Bills

BSNL lr No..2-28/2000/BSNL-TR dated 6.5.02: The details of a subscriber's unpaid bill(s)

must be promptly reflected in his/her subsequent bill. This has legal as well as customer-

relationship aspects and needs to be implemented sincerely.

11. Review of Security Deposits in r/o STD/ISD-PCOs

Additional Security deposits are to be demanded from STD/ISD PCO operators only after an

annual review and if their revenues have actually grown. The amount should be reasonable

and necessary.

These instructions reiterated vide this office circular No.23-Misc/CAG para/2002/TR-BSNL

dated 18.11.2002 may be strictly followed, till modified.

12. Action to Reduce Outstanding Telephone Dues

Instructions issued vide No. 4-14/2000-BSNL/TR dated 30.3.01 had emphasized the following actions by SSA’s so as to reduce outstanding telephone dues and enhance

recoveries from the defaulters.

(a) Officers in-charge of telephone exchanges to submit monthly lists of telephones

disconnected for non-payment and not restored for three months to the

Commercial Branch;

(b) The Commercial Branch to issue Closing Advice Notes to TRA Branch to finalize the concerned subscribers’ accounts.

(c) Defaulters’ Lists for outstanding dues to be promptly prepared in the SSAs.

(d) Outstanding Dues Pursuit Cells to function in all SSAs to realize and monitor recovery of outstanding dues.

(e) Liquidation Boards and High Power Committees to meet regularly to maximize collection of recoverable dues (and write-off irrecoverable dues);

(f) Monthly Management Meetings of Circles to monitor the performance of Liquidation Boards and High Power Committees.

Further, on item (a) the Director (Finance) had, vide No. 4-14/2000-BSNL/TR dated

the 2nd December 2002, particularly desired the following steps to be taken by the

Circles. Feedback sought in the matter was however not received from any Circle

except Kerala.



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(a) Daily updating of records relating to disconnections and restorations by

concerned units.

(b) Joint inspection of exchanges by a committee of officers from the TRA,

Commercial and FRS units to identify the cases needing issuance of closing

advice notes;

(c) Fixing responsibility where closing advice notes are not issued within 15 days

from the date of completion of the three-month period.

(d) Closing advice notes to be executed by exchanges and sent so as to reach

AOsTR within 15 days from the date of issue of the A/N’s.

(e) AOsTR to compute final bills and hand over to the Pursuit Cells within 7 days

from the dates of receipt of the executed Advice Notes.

The Chief General Managers of Telecom Circles are requested to kindly ensure strict

implementation, inter alia, of the above-mentioned rules and instructions in all SSAs under their jurisdiction so that BSNL does not suffer any avoidable losses of revenue.



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Questions on Revenue Assurance”

1. What are the 3 basic issues addressed by the Revenue Assurance?

2. How do we ensure that all the billable items have been captured?

3. How do we ensure that all billable events are billed correctly?

4. How do we ensure that the collections are recognized and correctly accounted?

5. Name ten areas of revenue assurance from mobile service?

6. Describe the steps for timely disconnection for non-payment?

7. Enumerate the steps to be taken on receipt of closure advice note for realization of

dues?

8. What are the facilities available for making the payment of bills issued by BSNL?

9. What is the procedure for issue of split bill in the case of first bill?

10. Whether the billing frequency of customers is decided with reference to their calling

habit? What are the billing schedules?

chapter - 25 revenue assurance · 2018-05-08 · revenue assurance (ra) is a business activity most...

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