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Many organizations do not pay attention to the late payment charges regularly charged by communications service providers if you miss your payment due date.
These fees can add up to hundreds or thousands of dollars a year. While the amount charged varies and is subject to state regulations in the United States, 1.5% monthly a typical charge which comes to 18% annually. Paying these bills late can also result in interruption of service for all types of fixed, mobile and cloud-based communication services.
Here are some suggestions on how to be sure you will not be paying these charges:
First, find out if your organization is indeed paying late payment charges and how much. Each service provider (e.g. Verizon, AT&T, T-Mobile, etc.) should be able to provide a report of how much you paid in these late fees for the past year and on what account numbers. This is a good first step.
If some accounts are repeatedly paid late, you may want to focus on these first to see what the problem is.
Next make a list of each account number with each service provider and ask your service provider representative to confirm both the “bill date” and the “due date.” Ask about the late payment charges, both how they are computed and at what point they will be applied.
Determine if you can negotiate more lenient payment terms, perhaps paying within 60 days rather than 30 days. If you are successful with this, make sure you get it in writing.
Ask if all your bills with the same service provider can be due on the same day of the month? If you can arrange this, it will minimize the likelihood of late payments as the due date for each account with that provider will be consistent.
How are your retrieving your monthly bills? If you can get them from the service provider portal that will be faster than waiting for paper bills and will increase the likelihood that you will be able to get them paid on time. If you use the services of an expense management company, they are likely downloading monthly bills to their portal where you can retrieve them readily.
If you receive many bills each month, make sure you have received each one. If a bill goes astray and you therefore do not pay it, you will still incur Late Payment Charges,
Dig into the invoice approval and payment process in your organization. Where might delays occur? Who initially receives the invoices (perhaps someone tracking the costs against a budget), who approves them (will a bill sit on a person’s desk or in their email in box and get overlooked?) and who ultimately issues payment to the service provider and in what form? (ACH transfers or some type of autopay arrangement is faster than sending a payment as a check through the mail.)
Is the correct and complete account number provided when a payment is sent? If not, it is likely that your payment may be misapplied to another of your accounts and the account for which it was intended will be considered unpaid and incur late payment charges. These bills can be confusing, often showing the current account number, an old account number and possibly a telephone number, but it is the account number that must be associated with the payment.
Also specify to which month’s charges the payment is to be applied.
Problems often start when you decide to “short pay” a bill due to a billing dispute. If you do this, be sure to document it with the service provider so it is clear what is being paid and what is being withheld and for what reason. Once confusion sets in, it is often time consulting to untangle it.
Most large communications service providers have separate departments in charge of collections. If your organization is large enough to have an account team, make sure that they are tuned into any billing issues that you are having so they may intervene on your behalf.
Many large organizations use the services of a telecommunications expense management (TEM) company whose hosted software can streamline your internal bill payment process with pre-determined workflows set up to address the payment cycle for each monthly invoice. Often different people have different “signing authority” depending upon the amount of the invoice, and this approval hierarchy is set up in the hosted system.
“Bill Pay” service is the ultimate solution, where the TEM company pays your bills for you and lets you know the total amount you need to deposit in an account. This service is sometimes offered at no charge since the TEM makes a commission by paying your bills with a credit card.
Focusing on late payment charges, while not the most exciting initiative you will undertake, can save your organization significant amounts, not to mention preserving a good credit rating.
