Telecom For Dummies

Every good invoice has a summary section. It is generally on the first or last few pages of your invoice. The section lists aggregate costs for everything on your invoice. The summary is the best place to start reviewing invoices from all of your carriers because it enables you to see the view from 30,000 feet before you focus on each area at ground level.

 Tip  If you have never reviewed your invoice, you will most likely need a guide. I suggest calling the customer service number on your invoice to find a helpful person to navigate and explain the terrain. Virtually every major carrier has an online presence. You can often answer basic questions by visiting the carrier Web site and looking for a Billing FAQ link.

Regardless of whether you’re trekking out on your own, or you have some help, you should start your journey in the summary section. Check out the following sections to find out what kind of information is included in the summary.

Previous balance, payments, and credits

This small section of the summary is a snapshot of your financial state of affairs with your carrier. It is helpful to check this area to confirm that your last payment was received and posted. If your last check was lost in the mail, you immediately see late charges growing on your account. If you don’t identify whether your carrier has received your last payment, late charges can build up for several months until you get a call from an accounts receivable representative. After that, you may spend another 30 to 60 days to unraveling the situation.

Here’s what you’re likely to see:

In this example, the previous invoice was underpaid by $75.23, so a late fee was assessed on the remaining balance. The remaining balance is added onto the new charges that reveal the balance due when the next payment is made.

 Remember  If you made a payment but it wasn’t received, finding out what went wrong may take a bit of time. When the payment is reapplied, you should receive a credit for the late fees. Do not take anyone’s word for it that a credit will be issued. If you do not see the credit noted on your account summary, it hasn’t been posted.

Checking aggregate costs and minutes per phone number or circuit

The summary area of your invoice includes several sections devoted to representing your phone usage in a meaningful way. One part may show all outgoing calls based on the phone number or circuit that originated them; another section may break out all outgoing calls based on whether they were interstate, intrastate, or international; another may lump all outgoing calls together based on the time of day the calls were made. (If you have questions about these call types, please visit Chapter 3 for a full explanation.)

You need to review your contract to see how you are supposed to be billed to determine which summary is the best to use. If you have one rate for in-state calls and another rate for out-of-state calls, a summary by type may be all you need. Divide the total number of minutes by the total charge, and you have your blended per-minute cost for that call type. If the rate is two cents higher than your contract stipulates it should be, you need to do some deeper investigating at the individual call level.

Addressing monthly recurring charges for dedicated circuits

When you activate or deactivate a dedicated circuit, you need to pay close attention to your invoice. If the circuit comes up on August 28, you see a prorated charge for the four days in August that the circuit was active; you’re not charged for the entire month.

Understanding that all charges of this nature are prorates is even more important when you are canceling a circuit. You need to confirm that the circuit is end-dated in billing so you receive a prorated charge until the circuit is deactivated. The fee should not appear on future invoices. If the people responsible for processing the cancellation order and physically tearing down the circuit aren’t talking to the people responsible for billing the circuit, you could continue to be charged for the circuit.

Understanding installation charges for dedicated circuits

When you activate (turn up) a dedicated circuit, you usually are charged for installation. You may see other nonrecurring charges associated with the turn up. Keep your quotes, correspondence, and amendments that you have signed to validate that they correspond with what you are actually charged. These charges should appear on your invoice once and only once.

 Tip  Try to get the installation fees waived if possible, or order your circuit when the carrier is running a free installation promotion.

Dealing with monthly recurring charges for features and services

This part of your invoice can drive you insane quicker than any other, whether you have dedicated circuits or not. This section lists all the special features you have on your phone lines or circuits. You may or may not even know that you have these features, but you are paying for them. If there is anything in the section that isn’t immediately obvious to you, do not feel bashful about asking your carrier for an explanation of the charges and services.

Check your contract to validate what recurring charges you should expect and how they are to be assessed. If you paid $75 for DNIS fees on your dedicated toll-free numbers, you may not remember that the fee was supposed to be per circuit, not per order, per toll-free number, or per location. These tiny distinctions can make a huge difference on your bottom line.

 Tip  Don’t continue to pay the $5.75 per month per phone line for the voicemail service you canceled six month ago; open a dispute and stop the bleeding.

 Tip  Price quotes for the access portions of dedicated circuits (also called local loops) are generally only valid for 30 or 45 days. If you spend two or three months negotiating the finer points of a contract, you may lose the pricing you were quoted. Always get a new quote about the fees for your local loop before you sign a contract for service. The new price may be lower, and you could be pleasantly surprised. It is also possible that your carrier decommissioned some of its hardware and the price jumped up by $150. Better to know that now before you commit your business to a 12-month contract. If you don’t know what a local loop is, see Chapter 8. For information about financial issues related to local loops, Chapter 2 is your destination.

Handling installation charges for features and services

When you add services, you probably have to pay a one-time installation fee. Services that go along with toll-free numbers and dedicated circuits are the most common to include installation fees, which can range from $1 per toll-free number to $1,500 per circuit, and everything in between. You need to confirm that all these charges match up with your contract to ensure there hasn’t been a breakdown in communication or a typo. This is another section of your invoice where you need your carrier on the phone to discuss what you are paying for and how it matches your quotes. And these charges are nonrecurring. After you pay them, they should go away.

Confirming that all the numbers listed are yours

While you are running down your phone bill, you should confirm that all the phone numbers listed as the source of your outbound calls actually belong to your business. The same goes for toll-free numbers on your invoice as well. You may think this isn’t much of a problem, but number confusion can happen easily. All regular phone numbers and toll-free numbers have about a six-month cooling off period after they’re cancelled before they can be reissued. After that, a number can easily be reactivated. If the new customer uses the same long-distance carrier you had with that number, things can get tricky, because your carrier may not have the number listed as blocked or inactive in its billing system. The carrier sees new calls coming onto its network from the number, so the carrier references it to your account and bills you for the usage. Oops. Computer error!

 Tip  Of course, the carrier isn’t in too much of a hurry to fix things. After all, at least someone’s being charged for the calls. If you see old phone numbers on your invoice, make a list of all the numbers that are not yours and dispute all the usage. Taking swift, assertive action may motivate your carrier to correct the issue quickly.

Analyzing other charges and discounts

If your business is a large telecom customer, you may have negotiated a volume discount based upon your usage. Good job! Unfortunately, the down side of this discount is the volume part. In order to receive the volume dis-count, you’re contractually bound to make a certain number of calls per month.

Usually, you’re given a ramp-up period of 30 to 90 days so that you can get up and running. Consider this a grace period. After this period ends, you’re charged a shortfall every month if you don’t meet your monthly commitment.

 Tip  If you have a volume commitment based on the aggregate usage for all of your locations and your carrier doesn’t link them together in its billing system, you could see a shortfall charge on the primary billing account. Alternatively, if you meet the volume requirements, make sure that volume discount applies; also make sure the discount corresponds with your contract.

Taking taxes into account

Everyone agrees that taxes need to be paid, but nobody can tell you with 100 percent certainty how much tax should be assessed on your phone bill. By everyone and nobody, I mean all the people whose job it is to assess and collect taxes for the federal, state, or local government.

There are so many gray areas about what charges apply to what type of service that we’re all functioning under a best-efforts environment. Everyone tries hard to do the right thing, and most everyone has a headache. Here are some general statements about taxes:

• Federal taxes apply to interstate and international calls.

• State and local taxes apply to local or intraLATA calls.

• Some taxes are based solely on the usage of a specific type of call. The

Poison control tax may only be charged on intrastate toll-free calls, but the new city tax may only apply to outbound intrastate calls.

• Some taxes are based on a percentage of usage plus other taxes (yes, tax on tax). Local taxes assessed on intrastate outbound calls may be charged based on both the usage and (some or all of) the state taxes assessed for the call.

• In some states, Internet ports aren’t taxed, but the dedicated circuit to reach the port is assessed tax.

• . . . And it gets more confusing from there.

Ask your carrier for a list of the taxes it charges customers, as well as the percentage used to assess each tax.

 Tip  Some cities and states are more heavily taxed, like Los Angeles, California; some, like Las Vegas, Nevada, are taxed less. If you have a high phone bill, shop around for different states where you can set up shop. If your business pays $15,000 or $20,000 in taxes, and you can cut that cost in half, it may make sense to move to the desert, especially if you’re in the business of selling air conditioning systems.