Going Dutch: the strategic importance of split billing

There’s far more to split billing than meets the eye. Laura Broers looks at how CSPs can help meet their customers’ needs while simultaneously putting themselves in a strategic role within the value chain. 

What is split billing, and why is it an issue?

Split billing is where charges for services on a single customer account are assigned to two or more parties. Traditionally, the onus was on the customer to split bills themselves, mainly because billing systems couldn’t support such a requirement - one account meant one bill.

This meant business users had to sit down with a ruler and highlighting pen to painstakingly go through their paper bills and separate home use from business use. For many employees this became a monthly headache to claim back their telecoms costs expenses; for sole traders, it was part of the annual grind of producing their tax return. But split bills were also a painful exercise for enterprise accounts departments, which had to check the amounts being claimed by employees line by line, but who had little visibility into what had been spent until these claims were put in – meaning they couldn’t intervene if costs were spiraling.

The reverse of this model involved enterprises paying for business lines and business phones and then reclaiming the cost of private usage from their employees – usually by deducting it from expenses or wages. This inevitably involved someone having to assess which charges were legitimate business charges and which were not, and resulted in disputes between the enterprise and its employees.

Moving to an electronic model (such as PDF) did little to remove the pain of calculating who should pay what. As a result, some businesses moved to giving their employees a monthly allowance for telecoms – avoiding the pain of calculating the cost by approximating. This approach also has its limitations, though, as inevitably businesses were overpaying some employees and likely underpaying others.

Why has attention returned to split billing?

Split billing has recently come under the spotlight again for two main reasons. The first is the move to mass homeworking, which means more employees need to claim back telecoms costs. This makes approximating too inexact a method for large enterprises, because the amounts involved are now significant. Likewise splitting bills in the traditional way impacts Employee Experience (EX) and is too expensive and time-consuming for enterprises to handle for large numbers of workers. They need their CSPs to deliver an easier solution for them.

The second reason split billing has received a lot of attention recently is the evolution of the B2B2X business model, which puts CSPs firmly in the center of business ecosystems. CSPs’ ability to manage charges between participants in these ecosystems is a highly strategic asset that becomes a vital part of their value proposition.

What do CSPs need to know about split billing?

There’s an opportunity for CSPs to deliver much easier split billing as they move to digital bills, removing much of the effort and frustration of calculating the share of the bill owed by another party. This saves accounting departments, cost center managers and employees considerable time each month – lowering the cost of managing bills and enhancing employee experience (EX).

CSPs can also offer additional features to make split billing even more effective and easier to manage. For example, they can offer customizable alerts and controls that either notify employees or businesses when the employee reaches a certain threshold (eg 90% of data has been used) to avoid bill shock events, prevent over-spending, and ensure continuity of service. This helps employees avoid embarrassing conversations with managers if they overspend on a service, and helps cost center managers monitor costs and be alerted before costs spiral out of control.

A step beyond this is to proactively analyze where individual users might be more suited to a different package or price plan, with CSPs suggesting better options to cost center owners. This can result in sustainable increases in revenue, a boost to customer satisfaction, and increased engagement and trust.

B2C implications for bill splitting

Bill splitting is highly useful as the work and home environment continue to blur with increased working from home and the rise of the Gig Economy. However, there’s another niche application for bill splitting in B2C. Increasing numbers of young people now live in shared accommodation and need to split bills between multiple occupants. Being able to do this digitally will appeal to this group of customers and boost their satisfaction with their CSP.

How can CSPs easily deliver split billing?

Although split billing does not sound like rocket science, it does come with significant challenges. Understanding internal the relationship between organization and employee, ensuring GDPR compliance, adapting to changes in employee roles in more dynamic work environments, all add to  the complexity of bill splitting.  

With the Calvi EBP and TEM solution, CSPs can offer their enterprise customers a variety of features that allow them to effectively assess and allocate their telecom expenses to specific employees, cost centers, or business units. Enterprise customers like to control their costs but do not necessarily like the administrative work that’s often required to control them. With Calvi’s Budget Control feature, CSPs can deliver a win-win to their enterprise customers – the ability to alert employees and line managers about their cost and usage, while simultaneously reducing the administrative burden.

Digital billing offers new possibilities for bill splitting to shift it from being an onerous and frustrating task to being something far more strategic that helps CSPs better meet the needs of their customers. Getting it right not only boosts customer experience, but can even lead to revenue uplifts and lower support costs, delivering benefits to both CSPs and their customers.

Split billing is an interesting topic and becomes more critical with people working from home. Calvi can help with the complex challenges around split billing while boosting the billing experience. If you’d like to know more, contact us for more information.