Billing and Revenue Management, or shortly BRM, is a term that describes all the processes that generate revenue, from charging, billing and invoicing to revenue tracking with advanced analytics and customer tracking.
Billing and Revenue Management (BRM) is not an economics term but a term from the software industry.
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Billing and Revenue Management in Industries
The term Billing and Revenue Management (BRM) is often used in connection with:
- subscription-based billing
- agile billing
- event-based billing
- metered billing
- usage-based billing
The term BRM most commonly appears in connection with the communication industry.
However, it also plays an important part in other industries like Energy & Utility, Software, Financial Services, Media & Entertainment, Healthcare, and Education.
Billing and Revenue Management (BRM) systems are suitable for any industry because they support diverse business models like B2C, B2B, or B2B2X.
Billing and Revenue Management (BRM) Functions
The functions of Billing and Revenue Management (BRM) and BRM systems fall into five primary groups:
- Charging
- Billing
- Balance management
- Customer management
- Business intelligence and reports
Charging Function in Billing and Revenue Management
The charging function determines the amount the customer will be charged for each charging event.
- First, the customer performs an action that triggers an event.
In telecommunications, that could be a phone call.
In utility, for example, electricity consumption. - In online charging, an event triggers a usage request, and the system checks customer balance data in real-time.
Then, it allows or disallows the event.
For instance, the system can block a call if the customer exceeds his balance on a prepaid mobile phone plan. - Next, the billing software captures and measures the event (duration, quantity used,…). According to the measurement and customers’ product offerings (price plan), the system then rates how much it needs to charge.
Occasionally, the product offerings can include usage charges, recurring charges (subscription charges), or both. - Finally, the charge is added to the customer’s account balance.
With the complexity of most of today’s product offerings, the charging function in Billing and Revenue Management must be automated to the fullest extent possible.
Billing Function in Billing and Revenue Management
Billing is the process of gathering all the charges in a customer’s balance and compiling them in a bill.
A billing cycle is usually monthly or when the customers’ balance reaches a certain amount.
The amount due is sent to the customer automatically as a payment request.
Commonly we call this invoicing.
The customer receives this payment request as a printed invoice or electronic invoice in his e-mail.
Or it can go directly to the customer’s credit card processor.
A BRM system also enables automatic payment collection and preparation of documents for banks to process instant payments.
Convergent (Consolidated) Charging and Billing
The term convergent billing is used mostly in communications, while other industries call it consolidated billing.
Knowing and using convergent charging or convergent billing in BRM – billing and revenue management is essential.
Specifically, it’s a term that describes the consolidation of all charges into a single customer bill.
Convergent charging allows businesses to charge and bill a customer collectively for a mix of services used.
BRM Balance Management
The customer balance is the amount that the customer owes or is credited with.
All charges accumulate in the customer account and are consolidated into a bill.
The payment request is sent, and when the customer’s payment is received, the balance amount will change to show the new balance.
Every customer account has one or more balance groups that record the customer’s assets.
A balance group can contain a balance in a currency such as a dollar or a euro or non-currency in call minutes or data transfer.
The service provider can also perform several balance management actions on a customer account.
They can perform adjustments, for instance, if the service was unavailable for some time or create disputes, settlements, and write-offs.
All this will not return the money directly to the customer but will change the balance in the account.
The last option is to refund or directly return the customer’s money.
Customer management in BRM
Every customer is assigned an account that includes all his information.
It can include information on the customer’s name and contact information, his service status (active, inactive,…), his charge offers, the customer balance, payment methods (invoice, credit card,…), and more.
Business Intelligence in BRM
The essential part of Revenue Management is analytics with various reports, aka business intelligence.
It is a crucial element in making informed, data-backed business decisions.
Some of the most common reports used in revenue management are:
- General ledger (G/L) reports are used to track revenue and expenses.
- Tax calculation to overview the impact of tax on product offerings.
- Revenue assurance to verify the accuracy of billing, valuation of ASC-606 and IFRS-15 revenue recognition standards, and prevent revenue leakage.
- Debt management or Collections identifies the accounts with overdue balances.
Then the system decides what action to take. - Other reports can be customized and accessed in the BRM system anytime.
Billing and Revenue Management (BRM) uses intelligent cloud-based billing software to automate billing and ensure revenue tracking and management.
The companies can efficiently calculate product offerings, perform charging and invoicing, and track revenue.
It improves and optimizes all companies’ operations, reduces human resources needed, eliminates errors, and improves customer satisfaction.
Billing and Revenue Management (BRM) offers businesses a complete view of their financial operations.
