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Billing System: Introduction

, 23 Jul 2005
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Introduction to telecommunication billing system.

Contents

Introduction

Telecommunication companies need an effective and accurate billing system to be able to assure their revenue. Billing systems process the usage of network equipment that is used during the service usage into a single Call Detail Record (CDR). The billing process involves receiving billing records from various networks, determining the billing rates associated with the billing records, calculating the cost for each billing record, aggregating these records periodically to generate invoices, sending invoices to the customer, and collecting payments received from the customer.

Billing system is very complex starting from network elements that generate usage to the billing system to usage collection, mediation, rating, and invoicing. To simplify the process I will introduce a simple system usage scenario as shown in the following figure. The system user navigates through the company site and views company services, and he decides to order one of the available services. If he has no account, he signs up for a new account, else he signs in. Then the user asks to conduct an order with the selected service. The service may be prepaid where he has to pay to have credits to use the service, or it may be postpaid, where he has to pay if the service has installation or setup fees, and later on he will pay for his usage of each billing cycle.

The billing system should provide service to the user, collect user usage records, and generate invoices of each credit expire, each billing cycle depends on the billing type, collect payments and adjust customers' balances as in the following figure:

System parts

We can divide the system into seven parts as in the following figure:

  1. Services
  2. Accounts
  3. Ratings
  4. Invoices and payments
  5. Reporting
  6. Help Desk
  7. Devices

Service

Service is the entity offered by the company and targeted to the customers. Each service is defined by an engineering employee as a service catalog which includes service type, name, billing policy, and its default rating profile. All of these attributes are described later in this article. After service ordering by the customer, it takes a unique ID which is attached with the account of the customer, provided by the provisioning system to the customer at a certain date.

Account

The customer account includes customer contact profile information, account type, login information, and payment method. Each customer account is linked in the system with specific services offered to this customer, and the customer will be billed depending on his usage of these services. Customer account belongs to a specific account type, which is related to some price plans determined by discounts and promotions.

Rating

One of the big issues in any billing system is how, when, and where the companies should bill their customers. Rating is the process of converting usage records from one form to another, like converting usage units to its cost. This process is essential in the billing process as it is the point of conversion of the service usage to revenue value to company, which is the target of telecommunication companies.

Invoices and payments

Each customer in the system has an account balance, which affects any invoices requested by the customer and any payments done by the customer. Normally the invoices are generated as a result of service hosting or using, and payments are the customer payments as a result of the invoicing operation.

Invoice

It is the entity generated by the billing system to inform the customer that he must pay for his service usage or ordering. Each invoice includes the customer account, date of payment, line items of the invoice, and invoice sales taxes. Invoices affect the account debits in the billing system. The invoice contents are shown in the following figure:

Payment

It is the process of collecting company money from the customers and adjusting their balances through adjusting the account debits and credits. The customers receive receipts of their payments. Receipt view is shown in the next figure. Each customer account should include its payment method to be used after generating invoices and to ask customers for payments.

Billing types

Billing types indicate whether and how the users pay to get and use the services.

Postpaid billing

In postpaid billing the customer may pay an insurance payment in advance, and he may pay the installation or setup fees, and in each billing cycle he will be invoiced (receive a bill) to pay for his usage of the service.

Prepaid billing

In prepaid billing the customer buys a given amount of credits (duration, volume, number of events) and is then allowed to use the corresponding network resources as long as their account is in credit. Billing system receives customer usage records from the network elements and adjusts the customer credits. When their credit has been used up, network usage will be restricted. Prepaid corresponds to a real-time process, because transactions are only allowed if the user account is in credit, and this has to be checked in real-time.

Summary

This article is a simple overview of the billing system and it needs more articles to investigate each part of the system. I prefer to divide this subject into many articles to facilitate understanding of the subject so that you can gain clear understanding of the billing operation.

References

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Comments and Discussions

 
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Questionwhat is the best software for Billing System Pinmemberasmain17-Apr-13 0:56 
QuestionBilling - book ordered PinmemberMember 935700716-Aug-12 8:07 
Generalmy vots is also 1 Pinmemberhackrogenius12-Mar-10 3:14 
GeneralRe: my vots is also 1 PinmemberHatem Mostafa12-Mar-10 5:05 
GeneralRe: my vots is also 1 Pinmemberhackrogenius12-Mar-10 5:12 
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GeneralHi PinmemberRabiya263-Aug-09 20:52 
Generalbilling System Pinmemberjohnphix27-Nov-08 16:44 
GeneralWhere is source Pinmemberjohnnysuede28-Apr-08 11:36 
GeneralRe: Where is source PinmemberHatem Mostafa28-Apr-08 20:39 
GeneralNeed for technical assistance PinmemberIsaya28-Jun-07 2:57 
GeneralFollow up article Pinmemberplayboy_corp16-May-07 1:48 
GeneralRe: Follow up article PinmemberHatem Mostafa21-May-07 7:51 
Generalsource code [modified] Pinmemberarun_maddy19-Sep-06 1:39 
GeneralRe: source code PinmemberYenabebe1-Jun-07 0:04 
Generaltime based PinmemberTaha Zayed28-Apr-06 4:03 
GeneralRe: time based PinmemberHatem Mostafa28-Apr-06 5:32 
QuestionAn excellent Introduction.. Pinmemberitzdeepak5-Feb-06 18:46 
GeneralThank you PinmemberMohammed Aziz Elnahrawi9-Jan-06 0:46 
GeneralThanks PinmemberMPulgar20-Jul-05 3:58 
GeneralRe: Thanks Pinmemberjoseph ting2-Dec-05 4:44 
GeneralRe: Thanks PinmemberHatemMostafa2-Dec-05 7:28 

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