Note 47: Customer details for Billing

Posted: 17 March 2008

Once the decision to trigger a customer's account for billing has been made, all the necessary customer information must be collected from different databases (and possibly external applications) for collation onto their bill.

Dates

The dates associated with the bill are key information in this extraction and collation process. Important dates include the 'extract to' date, the bill's issue date and the bill's due date. When a billing cycle's processing is delayed, one or more of these dates may be updated before bills are sent to customers.

'Extract to' date: This date is used in two ways. Recurring charges can use it to identify the historical date range for charges billed in arrears, or, in combination with the billing frequency, the future billing period for charges billed in advance.

The 'extract to' date can be used to select which usage charges will be extracted for the bill. Usage transactions continue to arrive in the billing systems, and this date provides a consistent cutoff criteria for charge selection. When a billing cycle is rerun or delayed, the 'extract to' date allows only transactions aligned with the bill's issue date to be selected. This approach reduces customer confusion by preventing bills from containing transactions dated after the bill's issue date. For consistency, a delayed billing cycle is unlikely to have its 'extract to' date adjusted.

Bill Issue Date: This date indicates when the bill was sent to the customer. During the billing cycle, this date may be set a day or two in the future to anticipate the elapsed time required to generate and send the bill (including any quality assurance processing).

A delayed billing cycle is unlikely to modify this date unless regulations for taxation or the biller's industry require the date to accurately reflect when bills were dispatched to customers.

Due Date: This date is the one most likely to be adjusted on a delayed billing cycle's bills. The due date is when the biller expects the customer to have paid the bill's debt. Even when a biller-generated delay means customers receive their bills late, customers may still have an expectation of a fixed period to pay their bill.

Depending on a biller's market, product and geographic scope, due dates may be set to the same value for all customers in a billing cycle, or may be calculated on a case by case basis to reflect the circumstances of each customer. Calculation components used when determining a due date can include:

Standard terms: Customers may receive standard terms of (say) 14 or 30 days in which to pay their bills. Variations between different market segments (e.g. business and residential customers) can result in a billing cycle generating a range of different due dates depending on the market segment and/or specific customer.
Distribution delays: Posted bills can take different times to reach customers depending on the location of the distribution (postal) source and customer's address (destination). Bills sent overseas are likely to take longer, perhaps differing by location. Domestic bills may have different delays based on whether the customers are located in the city, countryside or a remote location. Each of these outcomes may delay the due date by a different amount, though for simplicity there may be small number of standard delay categories (e.g. by postal code, or country).
Delivery methods: Different delivery methods will incur different levels of delay. A bill may be sent by post, courier, or via email. There are likely to be one or two standard distribution methods used (e.g. email and postal), with other methods employed by exception due to their cost (i.e. courier) or minimal additional benefit (to the customer and/or biller) over the standard distribution methods.
Operational processing: This is the time taken by the billing cycle from when a cycle starts processing to when a bill is distributed. There may be a standard duration used for all billing cycles, or if they are of uneven sizes, different durations may be assigned on a case by case basis. Changes to common products may result in billing cycles being temporarily slower as extra (prorata) processing is performed.
Public holidays: Geographic regions (e.g. states) can declare different public holiday dates, and the biller may choose to delay a bill's due date when it falls on a local public holiday. Such delays are more likely for non-corporate customers who pay their bills at retail shops that may be closed.

Business customers may set their payment dates (by contract) so that regardless of when their accounts are billed their debt is settled on specific due dates.

Extracted Customer Information

The information each biller places on their bill will include the financial details of the bill (e.g. list of charges, payment due date, payment methods), and a balance of regulatory requirements (e.g. tax details), company information (e.g. service contact details), marketing (e.g. new offers), and additional non-financial information (e.g. comparison graphs).

Customer specifics: These details will appear on the bill, or be used to drive the processing or formatting of the bill:

Recipient list: The list of recipients and the document types that will be generated for this customer in this billing cycle.
Postal address: There may be more than one of these if bill copies are distributed to multiple locations (e.g. accountants, branch offices)
Bill format: This can include customer and/or biller preferences for media, delivery, summarisation level, graphs and language (including braille and large fonts).
Market Segment: This can be used to drive default processing for pricing, formatting and remittance.
Non-financial totals - Examples of these include 'free' minutes remaining and earned frequent purchaser points.
Disputes: The customer may have raised disputes on prior bills. These disputes and their resolutions (if available) can be printed on the bill to inform and reassure the customer.
Adjustments: Explanations and resolution details for any adjustments made against the customer's account can also be extracted for presentation on the bill.
Customer relationships: Details of the customer's hierarchy and any cross-customer details can be extracted and used to influence the billing cycle's processing.
Rate / Discount Plans: Details of discounts applied during the billing cycle. These are more important when billing includes charges from multiple (rating) systems and cross-product discounts / rates are applied within the billing cycle rather than during rating.
Charge details: These charges are the reason for the entire billing process. The details extracted will include date ranges for recurring charges, and all the event/transaction information required for bill presentation (e.g. event time, quantities, unit-of-measure (UOM), from/to location descriptions, song name)

Financial information: This information describes the biller's view of the customer's financial position including any outstanding debt and recent payments.

Opening debt (credit) balance
Customer Payments
Adjustment (both credits and debits) and Credits (not associated with payments)
Current bill's debt (credit) amount payable: (calculated within the billing cycle)
Current outstanding amount: Calculated within the billing cycle, this arithmetic balance is based on the opening balance, any credit/debit amounts, and the amount of the new bill.
Details of interest calculated on outstanding debt: This information can include the applicable interest rate being applied.
Deposit amount: The biller may take a deposit from new customer to reduce the biller's credit risk.

Payment options: These details may be market segment specific, or could be different for customers under credit watch.

The biller's postal address for mailed payments (cheques): A secure address possibly processed on the biller's behalf by a bank.
Unique bill reference number: This reference number allows the biller to associate payments received to the customer and/or a specific bill.
External payment provider details: These payment options allow the customer to pay their bill at banks, postal agencies or other financial institutions (e.g. from banks using BPAY in Australia).
Details of the customer's direct debit: Using de-identified banking details (for security and privacy), the bill can indicate the amount, date and bank account/credit card from which the biller intends to deduct the bill's payment.

Messages: Messages can be extracted and/or tailored based on the customer's market segmentation, network use, purchase history, or be related to the customer's provisioned product set.

Marketing: Future pricing specials that may appeal to the customer
Pricing: Changes in the base pricing of products already provisioned to the customer.
Regulatory: These can include externally mandated messages on (new) taxes, surcharges or regulated price changes.
Inserts: Printed paper bills may have additional documents (e.g. special offers) inserted into the bill's envelope before being sealed and distributed. Using this approach, marketing information can be distributed cheaply. The inserts can be formatted with more detail and colours than are available in the regular bill printing process.

When charges have been extracted for billing, updates to the charges may be prevented. This is done to ensure that what is presented on the bill is consistent with the charge details held within the biller's databases. Updates to a customer's demographic data and provisioned products must also be carefully processed to ensure that updates are preserved. When the billing cycle completes and reflects what has been billed in the biller's databases, new and terminated product details must be preserved for subsequent (accurate) billing.

Interactions with the customer cannot be deferred whilst billing is performed, but how details are captured and applied must be carefully considered to ensure the biller's data integrity is preserved (no loss of maintenance, correct calculation of charges).

Tags: Billing, Customer, Invoice, Bill, Payment, Date, Marketing, Regulatory, Message