Billing & Monetization

Decentralized Billing: What It Is and Where It Fits

July 05, 2018

Several weeks ago, I had the opportunity to hear Gareth Morrison, Vice President of Finance at Vertafore, and Chris Mackley, Director of Finance at SBM Management Services, speak about the complexities of non-standard billing. Something that really stood out for me in this webcast was Mackley’s focus on decentralized billing. As described, decentralized billing doesn’t go through one central department; instead the sales managers are responsible for their accounts and invoices each month.

SBM Management Services offers custodial services as well as a number of other soft services such as landscaping and deep cleaning. The company works in dozens of locations across several states and services can be added to contracts on an as-needed basis. Decentralized billing can often be found in companies like SBM with multiple base contracts. Billing in such a way can be beneficial because sales managers know their clients, are in regular contact with them, and can quickly respond to questions or issues. Decentralized billing can also offer greater timeliness and responsiveness from request to proposal as well.

A benefit of decentralized billing mentioned by Mackley was in regards to ad-hoc work. It can be advantageous for many companies with services that change from month to month and which may be a one-time charge. SBM needs a system in place to accurately quote the client a price for unexpected services while on site and to easily and cleanly make certain that this same service and pricing is presented in the billing. Decentralized billing, in this instance, makes for quick and accurate invoicing and a simplified system for adjusting services as needed without consulting a main office.

But there are also challenges that can crop up in such a system.

  • How do you streamline the process and keep it organized and consistent with so many people initiating billing?
  • It’s good to have hands-on site managers, but how do you prevent errors while maintaining their involvement?
  • And, from a systems perspective, how can billing be a collaborative effort without relying on managers too heavily?

It comes down to best practices and learning from those with a centralized approach. In thinking through the recommendations that Chris and Gareth laid out, here are three best practices that any company taking a decentralized billing approach should consider:

  • Communication: Changes, updates, and expectations need to be communicated quickly and clearly to site managers so that they can use the system effectively.
  • Base Billing: A base contract price guide and system should be put into place so that site managers spend minimal time maintaining their customer invoices from month to month.
  • Automation: In addition to the baseline billing, the system for adding additional or one-time services should be streamlined and easy to use to reduce the chance of error.

Taking the time to put a streamlined, simple, and efficient process into place will benefit company and customer alike, but their value increases exponentially with decentralized billing. These best practices help managers maximize their time with customers and respond to questions quickly and accurately. In turn, the company can capitalize on the efficiency of a decentralized system to pass savings and features on to customers.

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