When processing large and complex telecommunications invoices, there are often account level charges such as taxes and other fees that don’t relate to individual service items. Often organizations lump these charges into a special accounting bucket for lack of a better approach.
The simplest alternative, is to simply spread the charges evenly over all of the line items on the bill. This however, isn’t usually the best approach. After all, the various line items and pieces of service on the invoice aren’t necessarily equal – both from a dollar standpoint, or from a GL system standpoint.
The better approach, is to spread the account level charges intelligently. This means allocating portions to different invoice line items based on some kind of logic. An example could be based simply on the overall proportion of the invoice a line item makes up – this would then dictate the portion of the account level charges the line item takes.
It can be even more complex though. It might make sense to your business to allocate account level taxes to just voice circuits, and other fees to just data circuits. At this point, you’re probably thinking that sounds like too much work.
That’s where hiring an experienced TEM company comes in. With years of experience and proven processes, a TEM partner can handle the heavy lifting of making the kinds of granular cost allocations and spreads easy. This enables your organization to enjoy the benefits of specific cost allocation and cost ownership, without incurring the costs and burden of implementation.
A win-win for all involved.