Is Your Billing System Handling Corner Cases Effectively?

Billing System - Handling Corner Cases

In one of my previous articles “Billing – A Complete Beginner’s Guide” I have covered the basics to a few advanced concepts of Billing. The current article could be considered an extension, covering some corner cases related to Billing which could lead to incorrect charges.

Ask any BSS or Billing expert, it is never easy to deal with Billing Cycles or Bill Runs. And it adds extra layers of complexities when you deal with fixed billing days (like, bill every 6^th of the month).

Just to add, I am not sharing any solutions or guidance in this article. This article covers only the problems or corner use cases that need to be handled by any Billing System.

Based on comments on the article or DMs, I will decide to write another article to discuss solutions around these cases. Again, the solutions absolutely depend upon the Service Providers' business use cases & business rules, capabilities of the COTS Billing System and customizations related to the current implementations.

Before we delve further, let’s cover some of the Billing basics –

Billing Engine: Billing Engine generates bills based on the charges calculated by the Rating engine. It also manages the billing cycles, payment due dates, and payment reminders. 

The billing system should support multiple payment methods and diverse billing cycles. For example, some customers may be billed on a monthly basis, while others may be billed quarterly.

Bill Run takes care of activities like handling deferred actions, creating bills, collecting credit card/direct debit payments, generating refunds, creating invoices, etc.

Billing Cycle consists of Billing Frequency & Billing Day of the Month (BDOM). 

Billing Frequency determines how often to bill the customer and request payments. Billing Frequency can be Monthly, Semi-Annually, Annually, etc.

Billing DOM determines when to finalize the bill. For example, a Customer billed on the 5th of every month.

Invoicing: The final step is to generate invoices. Invoices capture the charges for the consumed services that have been used. 
Invoices are typically sent to customers every month. Invoices are delivered via paper bills, emails, or online self-care portals. 

The invoice includes a detailed breakdown of the services used, charges applied, applicable discounts, taxes, and any applicable promotional messages. Invoices are the legal document that reflects accurate charges incurred by the Customer and payments are collected against them. 

The overall processing of Billing & Invoicing is shown below:

Billing and Invoicing Process

Listing below are some of the corner cases which could impact bill calculations and lead to severe customer impacts: -

• Proration: How your billing system behaves when it encounters any changes in subscription during the billing cycle. These changes could be –
• Activation in mid of bill cycle: Customer has activated an Add-on bundle on the 8^th of the month and the BDOM is the 2^nd. So, how the charges would be prorated for the partial month?

• Plan change (upgrade/downgrade): Customer has downgraded from Plan A to Plan B. Plan A downgrade also includes ETF or penalty. The billing system should be capable of calculating prorated Plan B activation charges and the downgrade penalty.

• Termination/Disconnection: Any termination or disconnection during the cycle could lead to a penalty or refund, depending on the business rules.

• Billing Cycle Alignment: Not every no. of billing days in a month or year are the same. Billing System should be capable enough to deal with Short months (having 28 or 29 days in a leap year) or Long months (31 days in a month). When dealing with such variations, is the Billing System taking care of pro-rated charges which may need adjustments or calculating usage-based charges on a special day like 29^th Feb?

• Usage across Billing Cycles: If any service usage (e.g. data session) spans across the current & next bill cycle, then how the usage split between cycles is handled by the Billing System? Example - Current Bill cycle is ending on 12 midnight of 20^th Feb. Data session started on 19^th Feb 11PM and ended at 20^th Feb 2AM.

• Delayed Batch Events Processing: Any delays in processing usage records may lead to incorrect allocation of charges to the wrong bill cycle. How would a Billing System ensure the right allocation?

• Delayed Bill Run: If the billing gets delayed or halted due to performance, functional or operational issues, then how would the Billing System take care of bill calculations allocated to the correct bill cycle and the associated due dates?

• Discounts applied mid of bill cycle: If the discount is added or removed during the billing cycle, then how would the Billing System deal with the discount amount being reflected or adjusted in the invoice?

• Rollover: If unused & permitted units of allowances (like, data, minutes, free units, etc.) roll over to the next bill cycle, then how does the Billing System ensure accurate calculations?

• Changes in Taxation: Any tax rate change during the bill cycle should result in accurate tax calculations based on a prorated basis. How does the Billing System make sure about accuracy?

• Partial Payments: If a customer makes a partial payment instead of a full payment against an invoice, how does the Billing System handle the outstanding balances against the bill?

• Disputes: Post bill run and invoice generation, if a customer disputes a charge, how does the Billing System reflect the adjustments?

• Family or Group Subscriptions: If the customer is a part of a family or group subscription, then how Billing System ensure the accurate calculations of individual as well as group charges?

• Mismatch in Time zones: If the Billing server and the generated Usage records are in different time zones, is the Billing System able to allocate the usage to the correct bill cycle?

This list represents just a small portion of the whole scope and is not exhaustive. 

By addressing these corner cases, a Billing System can ensure accurate and consistent billing for subscribers. 

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In upcoming articles, I will detail further topics related to Billing. Kindly share this article with your friends and colleagues. Feel free to like and comment. Happy learning.

Glossary: BSS (Business Support Systems), BDOM (Billing Day of the Month), COTS product (Commercial Off-The-Shelf product, like Amdocs billing), ETF (Early Termination Fees)

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