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Telecom Audit
In telecommunications, the term audit has the following
meanings:
Telecom Audit defines the act of conducting a review,
examination and reconciliation of Telecom, Wireless and Network customer
service records, invoicing and contract agreements in order to ensure
the accuracy of budgetary forecasting.
Independent review and examination of records and activities to
assess the adequacy of system controls, to ensure compliance with
established policies and operational procedures, and to recommend
necessary changes in controls, policies, or procedures.
Analysis of invoices, lines, rates, tariffs, taxes, plans, usage,
call volume, systems, and contracts resulting in cost reduction, proper
invoicing and optimization of telecommunication systems often conducted
by an independent telecommunications consultant or firm.
The simplest audits merely consist of comparing current
telecommunications billing and usage to other alternatives based on
their relative cost, security and reliability.
Complex audits utilize software applications, direct bargaining with
service providers and activity reports that include detail down to an
individual employee's usage.
Auditing Methods and Consultants
In business, companies with significant telecommunications costs or a
telecommunications focus normally either conduct audits internally or
hire a consultant. No matter the method, typical audits encompass one or
more of the following:
Telecom Expense Management(TEM): An ongoing analysis and adjustment of
internal telecommunications procedures and billing designed to maximize
savings.
Telecom RFP (Request For Proposals): A proposed management plan designed
to maximize efficiency, security and reliability in the business'
communications. Consultants typically present an RFP for approval by
their clients.
Management and Reporting: Ongoing telecommunications cost and activity
analytics. Internal auditors and consultants both use software as part
of the process: either a generalized database application or specialized
applications designed for auditing.
A common misconception is that a Telecom Audit only relates to the area
of telecom cost, when if fact it encompasses just about every
communications service that a business expends its budget on.
Audits may focus on mobile phones and devices, Internet service or land
line telephony, or they may encompass all three.
Independent telecom auditing firms are not affiliated with telecom
companies that sell mobile phones and devices, Internet service, long
distance calling or land line telephony.
They are independent and work on contingency.
Current Methods
Internal Audit
A business accounting department will generally only conduct a telecom
bill review in the months that trigger a red flag due to the sudden
spike in the expense of a communications service. This is usually
contained to the one telecom service provider who triggered the red flag
and the rest of the invoices are left unexamined because they fall
within the considered norm of a small monthly cost increase.
Contingency Fee Based Audit
Business Process Outsourcing BPO, telecom consultant companies can
provide a contingency fee based independent review and examination of
records and activities to assess the compliance of telecom service
providers with telecommunication contracts and State and Federal Tariffs.
Critical Steps
Establishing a "Book of Business" is the first step towards telecom
auditing. The Book of Business can be an Excel spreadsheet compiled
manually, that details every single line item charge associated with all
corporate telecom, network and wireless payables, or it can be
constructed by Electronic Data Interchange (EDI) feeds using TEM
(Telecom Expense Management) software.
Collect contractual agreements for each communication service that has a
telecommunication agreement in place with your company. Copies of
telecom service and equipment contracts can be requested from vendors if
an Enterprise or Corporate HQ does not have a central library containing
these legal documents.
Obtain the State and Federal Tariffs filed by each phone service
provider that pertains to each local, long distance and network circuit
service that connects your business to the Local Exchange Carrier (LEC)
in its geographic area.
Reconcile the Book of Business, Telecom Contracts and the State and
Federal Tariffs to identify any areas that can help lower a company's
communications budget.
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