Automated Invoice Validation System

Automated invoice validation requires a file from the telephone company. Most, if not all, telephone company–provided billing information is assembled in standard formats and made available on various transport media or transported across a network connection. If no validation system exists, or for whatever reason it’s desirable to design and build a new one, the process involves getting a file and proceeding to extract the required information from it. The key fields used to match to department allocation are the location and telephone numbers. Information in these fields must be unique. It is highly likely your organization already has unique location names or numbers. In and of itself, the unique name is not sufficient for full allocation. The telephone number making and receiving calls is unique to the telephone company, and they have their own counterpart to the location name, which is a physical port on a switch or access facility into the nearest wire center.

In addition to the key field data, detailed unit count and pricing for all fixed monthly charges and all variable or usage based charges should be extracted and carried over into a file in the organizational accounting system. In addition to the charges for service, taxes and other fees such as access charges and universal service fees should be extracted and maintained in the file. Essentially what has to be done is to take this file with the current charges and perform all the calculations done by the telephone company and re-create the same information, but instead of using the reference pricing they used, use a separate reference database.

Figure 1 is a conceptual diagram of the invoice validation system.

 

Figure 1: Telephone Billing File Interface to Enterprise Accounting System

It must be implemented in the organization’s information technology (IT) infrastructure or built separately and integrated with the other systems.

Note the dotted line from vendor pricing. It will become solid after completion of the standard cost development in steps 4 through 8. Resist temptation to jump too far too fast until you’re confident the following functions are being performed:

• Import the billing file
• Extract the desired data
• Compare the data from the reference file with the billing file and highlights exceptions
• Output a list of invoices with amounts due by department, location, and user name satisfactory for feeding the cost allocation process
• Output a file with taxes and desired details required for allocation and further possible tax treatment
• Output a file with any or all fees in a format acceptable for use by the accounting and reporting systems

This will provide a preliminary look at the difference between manual invoice validation and automated validation. So far the only expenditure is the billing tape (should be under $50 for each telephone company, $100 for one local and one long distance) and the value of the time of the programmer(s). When the bill data of the first service provider(s) is successfully imported into the accounting system, incremental service providers, locations, and service should require less time and occur smoothly. If there are issues with the second, be sure to go back and resolve any common issues with the first one. Over time and with additional service providers, adding more billing into the system will become routine.