By Neil Philpott, Account Manager/Europe, Trintech

Communications Service Providers (CSPs) striving for profitability in saturated markets offer an increasingly diverse set of new, higher margin products and services through a multiplicity of channels to entice customers to use them as their retailer of choice. For example, it is common now for customers to purchase top-up vouchers from corner shops, phones and accessories from independent high street stores and digital content from web portals, etc.

As the range of products and services grows, so too does the number of entities in the supply chain. Consequently the challenge of reconciling transactions and balances between the players in the order to cash value chain has expanded to become a back office nightmare. On the one hand, cash transactions at "own brand" high street stores, credit/debit card transactions over white labeled third-party web portals, etc. need to be reconciled with payments into the CSP's bank account, while on the other side of the equation, invoices and statements from digital content providers need to be reconciled with customer purchases.

Until recently, these reconciliations have been performed by back office finance teams using voluminous spreadsheets in labor-intensive processes that result in low reconciliation rates. However, CSPs, like other retailers, are now deploying automated reconciliation systems to increase reconciliation accuracy and reduce the level of effort involved. These "common, off-the shelf" computer applications are easily configurable to process files of transaction records from in-house systems and third parties (such as bank statements) to drive reconciliation accuracy at the individual transaction level into the 90 percent plus range.

Essential capabilities of best of breed reconciliation systems include the ability to:

• Accept transaction data in a wide variety of formats and process hundreds of thousands of records;
• Enrich the transaction data, for example, to translate between the merchant ID shown on a transaction on a bank statement and the internal reference for a particular store;
• Reconcile individual transactions from one source against bulk transactions from another, e.g. where a single bank transaction was performed for all the day's sales at a particular store;
• Perform complex matching with configurable tolerances that take account of partial transactions where delays in processing by a credit card processor may result in a credit card sale not appearing on the CC provider statement for up to 14 days;
• Handle commissions, interest charges, foreign currency exchange rate fluctuations, etc., which all conspire to reduce the number of simple 1:1 matches;
• Suggest a list of matches from which the user can select where an exact match is not possible and multiple approximate matches fall within tolerance limits;
• Assist in exception handling by automating rectification steps such as sending chasing emails and escalating issues to managers;
• By ensuring all revenues due from customers, resellers, etc. are received and correctly accounted for, while reducing the dependence on labor-intensive spreadsheets, the reconciliation system has an easily demonstrable business case. Add to this its ability to help pinpoint by store, dealer, etc. the need for process corrections and training, and even in some cases to identify fraud, and it's clear that CSPs operating without an automated reconciliation system are working with one hand tied behind their backs.

For more than 20 years, Neil Philpott has helped CSPs around the world to manage their customer lifecycle. He was President of the Global Billing Association, the forerunner to TM Forum's Revenue Assurance group for two years. Trintech is a global leader in the provision of financial governance, risk management and compliance software solutions with more than 600 clients worldwide.