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Financial Clearing from a different angle


In this blog post, I discuss my journey into the world of Financial Clearing (FC) and what I have learnt along the way.  

Financial or technical process? 

The complexity of Financial Clearing is often understated in the industry because it is perceived to be less technical and more of an 'accounting' process.

When I first heard of Financial Clearing almost twenty years ago, I too was puzzled about why my company at the time outsourced the work to a Financial Clearing agent.

As a finance specialist, my mission was to collaborate with the agent, learn about the process, and ensure a smooth settlement with Roaming Partners. 

Financial Clearing: more complex than it first appears 

Initially, I planned to bring the process back in-house as I felt it would give us back control of the service.

During the process assessment, my Roaming colleagues advised me to visit the GSMA Infocentre portal and familiarise myself with the end-to-end process before I made any decisions.

As I started reading all the related Permanent Reference Documents (PRDs), I realised that the Financial Clearing process has less to do with finance and accounting than I initially thought.

Invoicing and payment are just a tail of a relatively complex technical process, and to understand how the tail should work, I needed to start from the head.

The more I dug, the more questions I had. GSMA, together with mobile operators' experts, made it easier for all the newbies to learn.

So, this is where I started my journey, beginning with AA.12 and ending with…well I haven't found the end yet as it is still evolving!

From head to tail... and back 

Back then, roaming prices were high, traffic volumes relatively low, IOT was simple, and RAP files were a rarity.

Still, it was quite a challenge for finance teams to run an efficient process in-house.

To validate the incoming invoice, one had to understand the TAP cut-off date and how to handle late TAP files, the difference between public and private RAP files, and finally anticipate recycled records.

That did not sound like a finance thing.

However, this is part of Financial Clearing in this niche industry. And for the settlement, one should first have netted own invoice to decide if an overall position is payable or receivable and apply the SDR monthly pegged exchange rate (quoted on the 23rd previous month) to either own or partner's settlement currency.

Not to mention updating and maintaining contacts for hundreds of partners, tracking, and implementing all the industry changes, and so on.

All that seemed too much to deal with in the finance department!

I started to appreciate my Financial Clearing agent and all the heavy lifting they were doing for me.

I concluded that insourcing was no longer an option. 

It gets complicated 

With the evolution of new technologies and EU roaming regulations, the roaming settlement and, consequently, the financial clearing became more complicated. 

Eventually, operators and their agents were forced to develop new ways of charging and calculating settlements. An orthodox Financial Clearing process like we used to see two decades ago no longer exists.

Although the Billing and Charging Evolution (BCE) is dragging its feet compared to other similar industries, it is comforting to see that we are moving forward.

Reassess FC service management 

Today, many finance teams are thinking like I once did. They are considering either keeping or taking back control over their roaming FC and settlement in-house instead of giving it to the FCAs.

Whatever their reasons might be, I would challenge them to reassess. 

Let Comfone make it easier 

At Comfone, we have over twenty years of dedicated experience in Clearing. Over the years, we have gathered the technical knowledge and top FC experts in the industry to make it easy for finance teams worldwide.

Not only are we following the GSMA standards, but we are also proactively making new ones.

Payment control and clean books - the dream of every Accountant 

I am happy to share that our ePayments feature has been designed for all the hard-core finance colleagues.

It provides full flexibility and control over the settlements with no cycles, no FCA imposed deadlines, and various options to schedule payments according to business needs. Real-time visibility and transparency, approval workflow and absolute security are just some of the features, with more to come.

Cash allocation is probably the most critical part of the FC process. If appropriately done, it improves the settlement's overall results and minimizes the operational effort; hence, unallocated cash, which is a pain point for many operators, is not an option at Comfone.

With our transit and customer account principle, all the money on the customer accounts is allocated, resulting in clean books.

Our mission: excellent customer experience 

Finally, nurturing the relationship based on trust and the operational excellence that we provide to our customers is the core of the Financial Clearing team's mission.

We celebrate our customers' successes and give them a hand when they need it. In return, they reward us with their loyalty and kind words every day.

We share these simple messages of gratitude within the team and with the rest of the company to remind us why we are here and why we love our job. 

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