Thursday, July 15, 2010

Cost Recovery through the Billing Module

Issue Source: Workshops, Atlas Helpdesk, Networks, BOM Units

Affected Parties: Headquarters, Country Offices

Categorization: Efficiency – Application Usability

The implementation of the billing modules and associated processes has in fact increased the management costs of the cost recovery process as a whole. Prior to billing, bill for local services were settled through cash transfers or IOV. Billing, while clearly an altogether more appropriate tool, especially for reporting, certainly increases workload associated with cost recovery. Users question whether the use of billing has led to inefficiencies. The benefits of the new billing module are not clear to all users. They are aware that the UPL does not factor into service fees the cost of managing the billing – which goes un-recovered. Many feel that some of the inefficiencies would go away if increased automation was introduced into the billing module. In general, data collection and entry into the billing module is seen as a repetition of work already done, for example, when a payment voucher was raised. A customization of Accounts Payable and others modules so that they can be linked to Billing seems imperative from the User’s perspective. While this is a system issue, it is not straightforward in that there is not a clear approach as to which vouchers need to be billed. Thus it may not be a feasible, cost effective solution.

In another issue, at one time the agency report (also known as the Service Clearing Account or SCA report) did not include the agency ULO and reference fields from Billing. This has recently been addressed and these fields are now included on the report. This has helped to streamline the process and reduce the number of questions from agencies on billing transactions that have been charged through service clearing. More information on the agency report can be found in the “Agency Report” issue summary.

Further, missing agency fields on billed amounts may lead to the financial loss as UN agencies may refuse to recognize the charges. The missing agency field issue has been mitigated by changes to source systems and the Service Clearing Account report (see separate issue discussion for more information). However, there are still instances where agencies fail to provide the proper fields up front or country offices fail to properly enter the information. Country offices often do not report this to Office of Finance despite requests of information for follow-up, making it impossible to raise the issue with the other UN agencies.

There are interim measures available to cut down on the amount of work effort involved in handling cost recovery. Several country offices have developed innovative approaches to streamline the billing process using tools outside of Atlas. One of these tools, terms GeoBilling, was developed by the Georgia country office. This tool reads information from the Accounts Payable module for vouchers designated by the user and stages billing information onto a bill in the Billing module. The information can then be modified in Billing as needed. Various units within BOM reviewed this tool and have sanctioned it for use by all country offices until a better solution within Atlas is available.

There has also been discussion of using spreadsheets with GL journal entries in place of billing where cash is not exchanged. Another possibility is to look at using the Contracts module with negotiated amounts for UN Agency/UNDP project cost recovery instead of the UPL rates. However, at this point these other alternatives are only at the discussion stage and will require substantial policy changes in order to implement.

Users report at times that the UPL may not always cover the full cost of services provided.

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