The abbreviation BRM stands for Billing and Revenue Management. It describes all processes that generate revenue: Billing, invoicing and invoicing through 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 this is intelligent billing software that is used to simplify billing, invoicing and payments. Ultimately, this ensures that sales are maximized.
Important terms:
- Charging determines how much a customer should be charged for using the service and for recurring fees.
- Billing compiles the balance effects in an invoice, normally every month.
- Payment Processing requests a payment from the customer.
- Customer Management creates subscriber accounts and manages their status.
To summarize:
Billing and Revenue Management (BRM) is a fee, billing and revenue management system.
The various functions of BRM include the following points:
- Billing (charging)
- Invoicing/invoicing
- Balance management
- Customer management
- Business Intelligence
Which industries use Billing & Revenue Management?
Billing and revenue management are often referred to in connection with subscription-based billing, usage-based billing and other billing variants.
As mentioned above, the software industry uses this term. But it is also used in other industries, such as telecommunications, energy and utilities, financial services, media and entertainment, healthcare and education.
One thing is certain: billing and revenue management systems are suitable for every industry. This is 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, this action can be a telephone call, for example, which is then billed to the customer.
When we talk about online charging, an event triggers a usage request. In this case, the system can check the customer's account balance data in real time. It then allows or disallows the event. For example, the system can block a call if the customer exceeds their credit balance on a prepaid mobile tariff. The billing software is also able to record and measure the event (duration, amount used, etc.). Based on this measurement and the customer's product offer (price plan), the system then calculates how much it must charge the customer. The product offerings can include usage charges, recurring or subscription charges, or both. Finally, the charge is added to the customer's account balance.
The complexity of many product offerings leads to many challenges in the billing process. It is therefore a great advantage if billing and revenue management can be automated as far as possible.
Invoicing function in Billing and Revenue Management
During billing, all costs are collected in a customer's balance and summarized in an 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.
The invoice is then issued. Also known to many as a payment request. The amount due is automatically sent to the customer as a payment request. It can be sent to the customer in the form of a printed invoice or an electronic invoice by e-mail or as a request to the customer's bank. With a BRM system, automatic payment collection is also possible, as is the preparation of documents for banks to process immediate payments.
Convergent charging and billing
The knowledge and application of convergent charging and billing in BRM is essential. It describes the consolidation of all charges into a single customer bill. This billing method enables companies to bill the customer for a mix of different services together.
Balance management for BRM
The term "customer balance" refers to the amount that the customer owes or is credited. All charges are then collected in the customer account and can subsequently be summarized in an invoice. After the company has sent the payment request to its customer, the customer usually makes the payment. When this is received, the balance amount changes and is displayed in a new balance.
A customer account often 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.
A company can also carry out various actions on a customer account to manage the credit. This means, for example, that adjustments can be made if no service has been available for a while. Adjustments are also necessary if there are disputes or write-offs need to be made. These processes do not lead to a refund of the money, but to a change in the account balance. Only in the case of a refund will the customer receive their 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, their service status (active, inactive, ...), their fee offers, the 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 this customer can be managed.
Business Intelligence
In revenue management, analysis with various reports is one of the most important parts. In specialist circles, this is known as business intelligence. With the analyzed data, companies can make well-founded, data-based business decisions.
Frequent reports from Revenue Management:
- General ledger reports (G/L) for tracking income and expenses.
- Tax calculation to get an overview of the tax impact on product offerings.
- Receivables management or debt collection to identify accounts with overdue balances and determine whether action is required.
- Additional reports can be customized and called up in the BRM system at any time.
For billing and revenue management, companies are turning to intelligent, cloud-based software to automate billing and ensure revenue tracking and management. They can also efficiently calculate product offerings, perform billing and invoicing and track revenue. Properly implemented software therefore improves and optimizes processes within the company. This can reduce staffing requirements, eliminate errors and increase customer satisfaction.
The next stage is called BRIM
Billing and Revenue Innovation Management (BRIM) is a modular billing solution that is an important tool for simplifying complex billing and invoicing processes, especially for companies with extensive billing processes.
Editor's note:
For reasons of readability, the masculine form has been chosen for personal designations in the text; nevertheless, the information refers to members of both genders.
