The abbreviation BRM stands for Billing and Revenue Management. This describes all processes that generate revenue: Billing, invoicing and billing to revenue tracking with advanced analytics and customer tracking.
This term is used in the software industry, among others. Here it refers to the Billing and Revenue Management System or BRM platform. Behind it is intelligent billing software used to simplify billing, invoicing and payments. Ultimately, this ensures that sales are maximized.
- Charging determines how much a customer should be charged for using the service and for recurring charges.
- Billing compiles the balance impacts into one invoice, usually each month.
- Payment Processing requests a payment from the customer.
- Customer Management creates subscriber accounts and manages their status.
Billing and Revenue Management (BRM) is a charging, billing and revenue management system.
The various functions of BRM include the following:
- Billing (charging)
- Billing / Invoicing
- Balance management
- Customer management
- Business Intelligence
Which industries are talking about BRM?
As mentioned above, the software industry uses this term. But other industries, such as telecommunications, energy and utilities, financial services, media and entertainment, health care, and education, are also seeing a shift.
One thing is certain, billing and revenue management systems are suitable for any industry. Because they support different business models such as B2C, B2B or B2B2X.
What does Charging mean in connection with BRM?
The billing function (charging) determines the amount charged to the customer for each billing event.
An example of Charging: a customer performs an action that triggers an event. In the telecommunications industry, for example, this action can be a telephone call, which is then billed to the customer.
If one speaks of online charging, then an event triggers a usage request. In this case, the system can check the customer’s account balance data in real time. As a result, it allows or prohibits the event. For example, the system can block a call if the customer exceeds their credit on a prepaid mobile plan. In addition, the billing software is able to record and measure the event (duration, quantity consumed, …). Based on this measurement and the customer’s product offering (price plan), the system then calculates how much to charge the customer. Product offerings may include Usage Charges, Recurring or Subscription Charges, or both. Finally, the fee is added to the customer’s account balance.
The complexity of many product offerings leads to many challenges in the billing process. Therefore, it is a great advantage if billing and revenue management can be automated as much as possible.
Billing function in Billing and Revenue Management
Billing collects all costs in a customer’s balance and combines them into one invoice. This process then takes place in so-called billing cycles. Either daily, monthly, annually or when the customer’s balance reaches a certain amount.
Then the billing takes place. Also known to many as Payment Request. In this case, the amount due is automatically sent to the customer as a payment request. It can be sent in the form of a printed invoice or an electronic invoice by e-mail to the customer or as a request to the customer’s credit institution. With a BRM system, it is also possible to have automatic payment collection, or to prepare documents for banks to process immediate payments.
Convergent charging and billing
Knowledge and application of convergent charging and billing in BRM is essential. It describes the consolidation of all charges into a single customer invoice. This billing method allows companies to bill customers for a mix of services together.
Balance Management for BRM
The term customer balance refers to the amount owed or credited to the customer. All charges are then collected on the customer account and can subsequently be summarized in one invoice. After the company sends the payment request to its customer, the customer usually makes the payment. If this is received, the balance amount changes and is displayed in a new balance.
Often, a customer account has one or more balance groups that record the customer’s assets. Such a balance group can record a balance in a currency such as dollars or euros, for example. However, it is also possible to record a balance in a non-currency such as call minutes or data transfer.
On a customer account, a company can also perform various actions to manage the credit. This means that, for example, adjustments can be made if no service has been available for a while. Adjustments also become necessary when there are disputes or write-offs need to be created. These operations do not result in a refund of the money, but in a change in the balance of the account. Only in the case of a refund, the customer receives his money back directly.
Customer Management in BRM
A company creates an account for each customer. Important information such as the customer’s name and contact details, service status (active, inactive, …), fee offers, customer balance, payment methods (invoice, credit card, …) and so on are recorded there. This information is very important for customer management. The more knowledge there is about a customer, the better that customer can be managed.
In revenue management, analysis with various reports is one of the most important parts. This is called business intelligence in professional circles. With the data analyzed, companies can make informed, data-driven business decisions.
Frequent reports from revenue management:
- General ledger reports (G/L) to track revenues and expenses.
- Tax calculation to get an overview of the tax implications on product offerings.
- Receivables management or collections to identify accounts with past due balances and determine if action is required.
- Additional reports can be customized and accessed at any time in the BRM system.
For billing and revenue management, companies are turning to intelligent, cloud-based software to mandate automated billing to ensure revenue tracking and management. They can also efficiently calculate product quotes, perform billing and invoicing, and track revenue. Properly implemented software therefore improves and optimizes processes within the company. This can reduce staffing requirements, if necessary, eliminate errors, and increase customer satisfaction.
The next level is called BRIM
Billing and Revenue Innovation Management (BRIM) is a modular billing solution that is an important means of simplifying complex billing and invoicing processes, especially for companies with extensive billing processes.
For reasons of readability, the masculine form has been chosen for personal references in the text; nevertheless, the information refers to members of both genders.