How to Maximize Your Telecom Expense Management Budget

Evaluating telecommunications often falls at the bottom of a business’s priorities. However, most companies are missing out on the potential for revenue generation through effective telecom expense management (TEM). Following outmoded practices may feel comfortable, but the negative impact on costs year over year only grows. It's time to start looking at telecom expense management as a revenue source, not just a necessary chore.

A fundamental misunderstanding of TEM leads teams to assume that the goal is general expense monitoring and payment processing. While these elements play a vital role in sustaining smooth day-to-day operations, a proper approach to telecom expense management should result in a tangible return on investment. When optimized properly, your TEM solutions should generate savings that can be reallocated for further changes. 

Areas for improvement may quickly crop up when carefully examining the core elements of a telecom environment. While organizations should rely on professional TEM services for industry knowledge and software solutions, we’ll offer a collection of introductory tips outlining essential factors in maximizing budgets to achieve true cost savings. Whether the first step comes in the form of reducing sunken costs from billing inaccuracies or performing a complete inventory of managed devices, it only takes a few considerations to turn your telecom expenses into telecom income. 

Set Clear and Measurable Objectives

Creating goals for cost savings and budget optimization trackable is a necessary first step to creating an actionable path toward expense reduction. These goals should align with your foundational business objective, supporting overall growth and budget limitations. 

While the idea of slashing costs for high returns sounds appealing, the goal is to create a seamless and effective telecom environment, not one that underperforms after excess reduction. Setting specific targets, such as reducing telecom costs to a certain percentage within a year, provides a clear direction and motivation for the team​.

Well-defined and data-driven intent helps measure the success of TEM initiatives, giving your team hard evidence that even small changes bring a monetary windfall. It allows businesses to track progress and pivot to new budget strategies as new refinement opportunities arise.

For example, a goal to reduce international call costs is monitored by analyzing monthly bills and usage patterns. Regularly assessing these initiatives ensures that your telecom expense management efforts are on the right track and contribute positively to your organization's financial health.

Understanding Your Current Telecom Expenses

The following measure, arguably most important, to maximizing your budget is conducting a thorough telecom expense audit. This involves examining all telecom-related costs, including voice, data, mobile, and fixed services, for a holistic picture of the infrastructure ripe for optimization. 

Categorizing these expenses shows businesses precisely where their budget is being spent and identifies areas of inefficiency, prioritizing categories that result in the most significant costs. Regular telecom expense audits are essential to maintaining accuracy, accounting for all costs, and finding redundant services or underutilized resources that should be eliminated to save costs.

All too frequently, businesses continue to pay for telecom lines that are no longer in use or services that do not add value to operations. Conducting regular telecom expense audits is the first way companies check that they only pay for what they actually need and use. This process helps cut down unnecessary expenses and retain funds, providing real ROI for businesses that have only seen telecom expense management as an obligation. A detailed inventory of all telecom assets, including hardware and software, is crucial for effectively pinpointing underutilized elements and turning them into a chance for reduced spending.

The Essential Elements of Budget Optimization

Even if your business is starting from scratch and establishing a rough blueprint for future telecom infrastructure, understanding and implementing essential elements of budget optimization at the outset significantly impacts your long-term financial health. 

Spend reduction comes in many forms, some of the most effective being neglected as a second thought. Following these best practices puts your organization on the right path before unexpected charges become the norm.

Analyze Previous Billing Error Rates

A look at previous mistakes will help you uncover where your organization is leaving money on the table. Historical data provides valuable insights into common billing mistakes and highlights areas where costly errors frequently occur. After understanding these patterns, businesses can take proactive steps to prevent excessive spending in the future.

Start by thoroughly reviewing past invoices and payment records. Are there discrepancies, such as overcharges? Excess payment in the form of duplicate charges or services billed at incorrect rates? Recording these errors helps you understand their root causes, whether they stem from provider inaccuracies, internal processing errors, or miscommunications.

Once you have a clear picture of past billing errors, implement corrective measures like internal telecom expense audits or working closely with providers to keep billing accurate. Regularly analyzing billing error rates will help maintain the integrity of your telecom expense management and reveal costs that can be addressed quickly. 

Leverage Advanced Telecom Expense Management Software

Implementing programs designed for TEM significantly enhances your ability to manage expenses. Telecom expense management software that automates invoices and usage monitoring reduces manual work hours and increases accuracy, sending funds that would have otherwise been spent back into your budget. Reporting tools provide a closer look into usage patterns and highlight opportunities for cost savings. 

Cutting-edge technologies like artificial intelligence and live analytics tools identify trends and anomalies in telecom usage, helping businesses negotiate better rates between providers or switch to more cost-effective plans. Automated invoice management systems streamline receiving, validating, and paying telecom bills. 

Keeping payments on time eliminates late fees, significantly reducing unexpected costs. Making the most out of these programs built to cut down on telecom costs enables companies to harness the power of big data to make more informed decision-making.

Automate Invoice Processing

Accelerating bill creation, sending, and payment is crucial in fine-tuning telecom expense management. Manual bill payment processes aren’t just time-consuming; human error results in costly overpayments that go unchecked indefinitely or missed payments, leading to late fees. Implementing an automated bill payment system in your business removes weight from the payment process, keeping invoices paid accurately and on time.

Automation reduces the administrative burden on your finance team, freeing time wasted on paperwork and focusing on strategic development rather than getting caught up in routine payment processing. The right telecom expense management software should verify invoice details against contracted rates and usage data, flagging discrepancies for further review. This ensures that you only pay for what you agreed upon with vendors, and any errors are caught and rectified before additional costs are incurred.

Consider Negotiating Better Contracts with Telecom Providers

Another effective strategy for maximizing your TEM budget is regularly reviewing and renegotiating contracts with current partners. Use market data and benchmarks to negotiate better terms based on current usage and market rates, confirming that you’re getting the best possible deal and not overpaying for services. Telecom expense management software provides valuable insights during these negotiations, helping you secure more favorable terms​.

Being well-informed about the latest trends and rates in the telecom industry can give you a leg up during negotiations — if you enter a discussion already understanding the current market rates for data services, your odds of negotiating lower prices or better packages with your provider skyrocket.

Collaborate Alongside Expert TEM Services

Outsourcing support to specialized providers lends significant benefits:

• Providers offer comprehensive solutions such as telecom expense audit and optimization services, aiding in the search for cost-saving opportunities and raising the value of telecom investments without an extended discovery phase.
• TEM providers offer tools and advice that may only be available to those with years of verifiable experience.
• Working closely with these providers allows for tailored solutions that fit the unique requirements of an established telecom environment, providing bespoke cost optimizations instead of boilerplate recommendations.

Benefiting from the experience and resources of TEM providers helps businesses manage their telecom expenses more effectively, reducing the strain on internal teams and leaving a vital portion of your budget development efforts to the professionals.

Monitor Performance for Continuous Improvement

Prioritizing regular analysis of budget optimization and routine telecom expense audits are the backbone of maintaining control over telecom expenses. Regularly reviewing usage maintains budget adherence and identifies new savings opportunities. Continuously refining TEM strategies based on findings and changing business needs helps achieve sustained cost savings.

Regularly reviewing telecom bills reveals discrepancies or billing errors that might otherwise go unnoticed. Addressing potential costs prevents overpayments and recovers lost funds following a trace of untracked payments. From keeping track of company-wide usage patterns to minute aspects like tax changes, inspecting changes that appear and trends from external factors will keep disparate spending in check. 

Master Your Budget with Telecom Expertise

Aspiring to turn standard internal maintenance into a source of extra funds isn’t just a possibility; well-optimized telecom expense management can be a reliable source of budget improvement over time. Establishing a management lifecycle — your team’s own optimization procedure that can be replicated each quarter or year — acts as a framework for regularly identifying abnormalities that quietly siphon funds from your budget.

If you’re looking for guidance on creating a healthy telecom environment and professional TEM services, consider partnering with Sakon. Our team of professionals is ready to help you optimize your telecom expenses and drive significant cost savings for your business. Contact us today to learn more about how we can support your telecom expense management needs.