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Metrics for Billing Dept

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  • #30159

    Sinnicks
    Participant

    Hello Everyone:
    I’m wondering if anyone is (or has implemented) implementing Six Sigma metrics (effectiveness and efficiency) for the Accounts Receivable dept at the operations level.  I’m just trying to get a feel for different ways of measuring billing accuracy, Defects in billing statements, timeliness, cost….etc being implemented that are widely accepted and understood.  It’s a key part of the project I’m working on in establishing new metrics.
    Any ideas are greatly appreciated!
    Thanks,
     
    Mark
     

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    #78285

    Cindy
    Participant

    Mark, not sure who you work for, but I am sure that someone at Telstra in Australia would be doing a similar project. I would recommend looking at your customer complaints department and seeing the volumes of complaints that come through regarding your billing, and do a sample of bills to audit, and compare to what should be there. But you have probably done that already.
    Good luck with your project.

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    #78296

    Johan
    Participant

    Mark,
    We looked at the different reasons for issuing creditnotes to the customers. Some can be attributed to billing errors.
    Cheers,
    Johan

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    #78415

    Shari
    Member

    Mark,
    My first BB project was on improving Invoice Accuracy by reducing invoice undercharges. Value was $2.4 Million.  The Cause and Effect Matrix might be interesting for you. Contact me via e-mail for more information.
    Shari

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    #78419

    Sinnicks
    Participant

    Shari, I would be very interested in contacting you about billing metrics and your Black Belt project.  Could you post your e-mail on this site?Thanks,Mark

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    #78426

    Brad M.
    Participant

    Shari,
    I too would be interested in this information.  I am currently evaluating the need for a project in our Accounts Receiveable area and this information would be very helpful in our ROI analysis.  Thanks in advance.
    Brad M.
    [email protected]

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    #78429

    Norbert
    Participant

    Me, too, Shari – I know someone who did this project and she would be very interested in your findings, I am sure.

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    #78430

    Rick R.
    Member

    Use the “Search The Forum” history index on the right hand side of the message board.  Last week tons of info was shared regarding billing, invoicing, AR/GL, metrics used, where to look for opportunity…that sort of thing.
     
    Regards,
    Rick R. MBB

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    #78491

    Saherngu
    Participant

    Hi, Shari. I’ll appreciate it if you can share. Thanks.
    Regards
    James

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    #78500

    Shari
    Member

    1. First we gathered VOC data. Downloaded data on Reasons for Credit/Debit memos from SAP, created pareto chart to determine key reason.
    2. ID’d key reason was Pricing
    3.  Developed project Charter – see problem statement below:

    Company sends out invoices which contain errors.
    The problem exists across all customers invoiced
    Company loses revenue when our price is lower than it should be on the invoice
    Company’s DSO (Days Sales Outstanding) can increase when a credit or debit memo is issued.
    Incorrect invoice pricing causes rework for both the external and internal customer adding to the time spent to resolve issues and issue credit and debit memos. Time effects both the external and internal customer
    4.  Be sure to identify the scope/keep it narrow.
    5. Create Project Y Flowdown
    6.  Key Performance Measure–Project Y1

    Non-recovered invoice undercharges. (This represents NET lost revenue subtracting debit memos if they have been issued).
    Measure Type: continuous
    Measurement Units: $/invoice (based on 35 random samples per month)
    Transfer Function: Y = Lost revenue (non-recovered invoice undercharges)
    7.  Develop Measurement Plan
    8.  Develop GOAL based on baseline measurements

    Reduce our monthly average invoice undercharges from $261 to less than $78/invoice per month
    SOFT savings:Average # of Credits per month: 56;Average # of Debits per month: 18;Total average of 74;Average of $25 per credit/debit memo processed;$1850/month cost today. $22,200/year.  Reduction in 70% is reduction to 22 debits/credits per month or $15,540 per year.
     
    Hope this helps. If you need more, e-mail me directly.

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    #78881

    Fontanilla
    Participant

    Shari,
    Can i get your e-mail.  I am doing a project that is very similar to the one you have done and like to get some insight.  It looks like i have done the same thing you had in the begining but would like some more information.  Thanks.
    [email protected]
    Dan
     
     

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    #80079

    john moreno
    Participant

    Our group is working to establish a Revenue Assurance Program for our company. Does anyone have any advice? The program include the entire revenue stream begining with base station to the GL and all parallel processes.
     
    Thanks!

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    #80852

    Pam Frank
    Participant

    Shari,
    I would be interested in seeing your Cause and Effect Matrix.  I too am working on establishing Billing Metrics primarily around Collections.
    Thank you.
    Pam

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    #82375

    Shame on you
    Member

    All these wankers wanting to see someone else’s work.  You lose creativity when “borrowing” other peoples ideas.  Laziness too.

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    #90049

    Cindy
    Participant

    Mark,  I have built a system that measures billing department performance for one of my clients.  If you might be interested in this type of system, let me know.

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    #92256

    Ropp
    Participant

    These people aren’t lazy they are just trying to find ways to work smarter not harder. I applaud those who share information to improve their’s and others processes.

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    #92452

    Sam Aborne
    Member

    I would be very interested in learning about your system.
     
    Sam
    cpiesam @ netscape dot net

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    #92510

    Jonn
    Participant

    Hi Shari,
    Can I get more information on this…
    Regards,
    Jonn

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    #96322

    Ximena
    Member

    I am working ondevoloping billing and credit measurements to better serve our cutumer and and the same time saving money in the company by reducing the number of credits and rebills that need to be done for each contract. Can you contact me if you have stanblished any metrics around billing or credit/rebills?
    [email protected]
    Thank you

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    #96333

    Ximena
    Member

    Cindy,
    I am interested in the metrics you developed. Please contact me with any information you can share.
    Thanks
    [email protected]

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    #104667

    Brendan
    Participant

    Cindy, I’d be interested in any information you can share as well.

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    #108634

    Sinnicks
    Participant

    Cindy or anyone that has communicated with her.  I’d be very interested in seeing what mertics have been developed from an BIlling IT perspective.  Thank you – Mark.

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    #110016

    Keren
    Participant

    I would love to see any information as well.
    Keren
    [email protected]

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    #116138

    shaina
    Member

    Cindy,
    am working on performance measurement of the billing dept of company.as u have worked on such system, kindly do let me know what kind of metrics should be collected for improving the billing process.

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    #116710

    Pacchiana
    Member

    Shaina,
    I am just about to start working on my Six Sigma project which deals with “improvement of the billing process” . This encompasses reducing the number of credit notes issued as a result of billing errors.
    I would appreciate if you could share with me the metrics which you have identified as part of your project or any other information.
    Many thanks
    Sharon

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    #116713

    Kraft
    Participant

    Mark,
    If you would, I would like to know the definitions being used for “effectivness” and “effeciency” in your situation. 
    Bob K 

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    #116717

    Sinnicks
    Participant

    Effectiveness Metrics:  DPU, % Defectives (or the “Y’s”), RTY for invoice
    Efficiency Metrics: % Value-added Time, %Correct Invoices/FTE,

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    #116719

    Kraft
    Participant

    Thanks Mark!!
    I appreciate your reply
    Bob K

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    #120908

    johansson
    Participant

    Hi Cindy,
    I would very much appreciate if you could share with me the system that measures billing department performance you developed.
    Thank you very much in advance!
    max
     

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    #136123

    Vinay Kumar
    Member

    Yes that can be done.I have just complted one in similar line.
    Mail me [email protected]
     
    Vinay Kumar

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    #141696

    Tom marotta
    Member

    Anything ylou can share would be appreciated Cindy.

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    #141701

    Six Sigma Tom
    Member

    I heard (in Australia) that Telstra disbanded their entire Six Sigma effort.

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    #148100

    keyes
    Participant

    Hi Mark or Cindy,
    I would be very interested in speaking with you about your projects and, Cindy, the system you designed to help in the analysis of the data. 
    I see this is an old post, but please let me know if you can help.
     
    Cheers
     
    Greg

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    #171864

    k
    Participant

    Hello,Do you still information on Account Receivable project. If so please send it to me at [email protected]. Thank you.

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