CSP Invoice and Bill Reconciliation is not such a Big Challenge?

Experience with CSPs

Since we launched the Work 365 solution, I have had the opportunity to talk to a lot of CSP partners.

Quite often, partners will start out the conversation with "We just need help with reconciling our Microsoft bills. Can your solution do that?". My initial reaction would be "not currently as a product feature, but you don’t need to because Work 365 does all the subscription management for you!"

As I started to have more conversations and in looking at our own operational data, I realized that reconciliation is not a technology or feature discussion but more a business process discussion.

CSP Invoice and Bill Reconciliation

As Microsoft CSPs, we receive monthly bills for all the different subscriptions including Microsoft bills, distributor bills, and other third-party bills for products and services that we resell to our end customers. Our end customers are paying with different terms, discounts and on different billing frequencies.

Also, these end-customers use multiple channels like Self-Service and e-commerce sites, online chats and customer and sales email inboxes. With so many moving parts, it’s important to have a process and tools that support the reconciliation process in a timely manner.

However, the reality is that reconciliation is the reward for using a proper system and not the sole purpose of what a system is meant to do.

Reconciliation is a well-known process used by accountants and book-keepers to ensure that financial numbers tie-up between different accounts.

However, you wouldn’t buy an Accounting system just because you want reconciliation? An accounting system will maintain a reconciliation log, but you use the accounting system to run your business for activities like invoicing customers, collecting money, paying bills and keep all your financial transactions up to date.

Good accounting practice means you maintain all your transactions in the system and follow a process every month to ensure all the accounts in your system reconcile with all the balances shown in other statements.

Every account has a starting balance, we perform transactions like sales, and paying bills and at the end, there is an ending balance. The idea is that the starting and ending balance should match what your expectations are based on all the transactions that have occurred during the period.

So, if you are missing transactions the balances will not match. The outcome of a reconciled account is a result of entering all the transactions that have occurred during that period. In principle, if all the transactions were always accurately entered your account balances will always be reconciled and accurate.

If we extend this to the reconciliation that we seek as CSPs, we want the bills in our system to equal exactly the bill that we receive from Microsoft or other cloud or service vendors.

Subscription Management and Invoicing for CSPs

If we follow the same logic on entering all the transactions through the system the balances will be reconciled. Work 365‘s Subscription Management and Invoicing functionality enable the tracking and changes for all subscriptions.

We start with a subscription quantity, enter all the additions and subtractions into the system and we have an ending quantity. Accountants and book-keepers have formed corporate habits of entering invoices and bills into the accounting system, Customer service and Sales should do the same for the subscription changes through Work 365.

Below is a what a habit loop looks like. A Habit loop is a pattern that governs any habit, and corporate culture and habits are formed in the same way as human habits.

A trigger or a cue leads to a routine, if that routine leads to a reward, the same routine follows every time we encounter the cue.

When all the subscription additions and subtractions are in one system it becomes easy to perform reconciliation. CSP bill reconciliation is exactly this type of reward for using the Work 365 system and ensuring that transactions, additions, subtractions are all in one system.

However, reconciliation as the formal process still needs to be done even if all transactions are entered with intent and there are several reasons where the reality is different from what the system reflects.

1. There is an error in the received bill or invoice
2. Process breakdown where transactions are missed- like cancellations
3. Price changes in the subscriptions

Some of these situations will occur as you ramp up sales or experience growth. As managers and accountants, we need to ensure that there is no leakage or loss and there is a business process with tools that demonstrate evidence of a reconciled bill.

Work 365 will include reconciliation as a formal feature that will quickly match CSP invoices with the matching rules for:

• Account Name
• Subscription Name
• Quantity
• Sales Price

Work 365 is about peace of mind and reconciliation is one more way in which you gain peace of mind.

Work 365 eliminates billing and invoicing challenges for Microsoft CSP Partners. Built on Dynamics 365 CRM Customer experience platform for Microsoft Partners and Cloud Solution Providers (CSPs). Check out our Subscription Billing Software for CSPs.

Source : https://www.linkedin.com/pulse/csp-invoice-bill-reconciliation-big-challenge-ismail-nalwala/

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