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What is Billing Information

Accountable for billing information and want some practical suggestions to reduce information management costs?

What is a billing?

Companies send bills, or invoices, to customers after products have beenBilling Information ordered and shipped. This invoice is considered an account receivable until it is paid. An invoice might be an Internet confirmation of an amount that will be billed to your credit card, or it might be a multi-page document covering several purchase orders.

What information is needed to manage billing?

Effective management requires answers to questions such as:
  • Has an invoice been sent?
  • Who received the invoice?
  • What was the invoice for?
  • How was the invoice sent e.g. mail, email, or Internet service such as e-post?
  • When was the invoice sent?
What information is required for invoice management?

Invoices are like orders—They are comprised of:
  • Invoice header; and
  • Invoice line items.
Invoice header information includes:
  • Invoice terms, i.e. terms that apply to the entire invoice;
  • Invoice status, e.g. sent, void, paid
  • Billing information such as:
  • Billed from, e.g. the company department which sent the invoice;
  • Billed to, e.g. the customer who received the invoice; and
  • Billing account, e.g. an account or credit card information that was billed.
Invoice line item information includes:
  • Shipment line item (and product) billed via the invoice;
  • Taxes;
  • Shipping charges; and
  • Invoice adjustment amounts, if applicable.
What other information is involved with billing management?

Billing entry systems may require data from other systems such as:
  • Order management, to relate each billing line item to an order line item;
  • Shipment management, to trigger the invoice billing process;
  • Invoice management, to trigger invoice processing business functions; and
  • Accounting management, to update accounts receivable.
What are some billing information challenges?

The key challenge I have seen is lack of synchronization between order entry, shipping, and billing management data.  Products are ordered, but are not in stock and back-orders are required which require a second shipment and possibly a second or even third invoice. 

These challenges exist because many company management information systems operate as independent systems and rely on data transfers to maintain data e.g.
  • The order management system will process orders and then send a notification to the inventory management and shipping management systems to handle shipping;
  • When shipping is complete, a notification is sent to the billing management system to finalize billing; and
  • When invoices are sent, a notification is sent to the accounting management system to update accounts receivable.
Sometimes things get lost along the way and invoices are not sent, or sent for the wrong products.

This data movement introduces opportunities for error and data quality issues.

Why is billing information important?

Product billing is a key business function. Companies need to know the status of all invoices to answer customer questions and to ensure that payment is received for all products.

What is a better way to manage this information?

Maintaining billing data in a variety of individual databases is less efficient than storing it in one database and having all applications access the data as needed.

A suggested approach is to create a logical model and then use it to drive the design of a single relational database to store billing data and other data, which is related to billing.

Applications that need this data should then access the common database thus eliminating the data movement required to synchronize individual silo systems.

Summary…

Billing information is used by many corporate management information systems and needs to be managed to avoid storing redundant data. Data storage designs should be based in an enterprise logical data model to ensure better return on information management investment.


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