Rebilling

What is Rebilling?

Rebilling is the practice of issuing a new billing document to replace an inaccurate or incomplete original invoice. This often occurs when the original billing document contains errors, such as incorrect charges, omitted fees, or misrepresentations of services provided.

In such cases, the billing team voids the flawed invoice and issues a corrected one, called a “rebill.” This new invoice contains the adjusted amounts, ensuring the customer is only charged for the services rendered.

Rebilling is also a requirement if a shipment is changed, incurs unforeseen charges, or the customer requests additional services after fulfillment has already taken place. In the case of unexpected costs incurred during transit (such as fuel surcharges or customs fees), the carrier may send a separate invoice or add these charges to the final bill.

Rebilling serves two purposes: to ensure accurate record keeping and to protect the customer from being overcharged. On the vendor side, it prevents revenue leakage, inventory and logistics problems associated with miscounted SKUs, and other costly errors. For buyers, it verifies they get what they pay for.

Synonyms

• Re-invoicing
• Billing adjustment

Circumstances That Require Rebilling

Rebilling is a necessary step in the billing process whenever there is an error or discrepancy in the original billing document.

Common causes of rebilling include:

• Incorrect item pricing — The original invoice listed the wrong prices for one or more items.
• Miscalculated taxes — The vendor incorrectly calculated sales or other applicable taxes on the first invoice.
• Incorrect product/quantity — The type and number of items or units listed on the original invoice don’t accurately reflect the items sold.
• Omitted charges — Fees or costs that should have been included initially, like shipping or handling fees, that were left out as a customer service remediation.
• Double billing — An item or service was inadvertently billed more than once on the original invoice.
• Wrong customer information — The initial invoice was sent with incorrect customer details, such as the name, address, or account number.
• Late fees or penalties — Additional charges need to be applied due to late payment or other contract violations by the customer.
• Change in service — The scope or nature of the services provided changed after the initial invoice, requiring adjustments to the charges.
• Discounts and promotions — Discounts, credits, or promotional rates were not applied but should have been, necessitating a corrected invoice.
• Unforeseen costs — Costs that were not anticipated in the initial invoice, such as those arising from unexpected difficulties in shipping or service provision.
• Price renegotiation — When customers receive an invoice with charges they weren’t expecting, the vendor or service provider may renegotiate pricing or payment terms and issue a new invoice.

How to Streamline the Rebilling Process

The rebilling process is typically a reactionary measure in billing operations. The easiest way to simplify and streamline the process is to be proactive about avoiding errors in the first place.

There are a few steps companies should take to streamline their rebilling process:

Run regular audits.

Regularly reviewing customer accounts, running audits for mispriced items, and double-checking tax calculations prevent costly mistakes from occurring. Automating manual processes like invoice creation or payment collection can also reduce the potential for human error.

For those instances when a rebill is necessary, invoicing and payment reconciliation solutions can help identify anomalies automatically. They can also generate new invoices with the correct information (or, at the very least, make them easy to configure and resend).

Standardize the process for handling disputes.

Even if a billing solution doesn’t catch an error, the customer probably will. Whether it’s right away or several months later when they’re looking into their expenses, they’ll eventually reach out and ask about the discrepancy.

Having a standardized dispute management process can save a lot of time and hassle. Plus, it can prevent chargebacks.

To handle disputes effectively, companies should establish a start-to-finish process for:

• Accepting customer inquiries (e.g., a submission form on the website/customer portal or in-app)
• Processing those inquiries and routing them to the appropriate department
• Evaluating and validating claims for accuracy and legitimacy
• Creating new bills or adjusting old ones as needed
• Reissuing corrected documents to the customer
• Keeping customers informed throughout the process, especially when making changes and issuing refunds

Train your team.

Familiarize your billing team with the software solutions they use, and offer ongoing training or support materials they can refer to when a rebilling scenario comes up. They should understand how to adjust bills for discounts, taxes, and other fees correctly and identify any mistakes that may require a rebill.

They should also know (and be able to refer to) your company’s requirements for billing compliance. Not all rebilling instances are black-and-white — omitted charges and price changes, for example, may or may not be allowed depending on the customer’s situation. Give your team the resources they need to adhere to the correct procedures when reconciling payments, making changes to pricing, and adjusting customer accounts.

Also train them on your dispute management procedures. This way, they’ll know how to respond quickly and appropriately when customers submit billing discrepancies.

How Billing Software Ensures Accurate Billing

Billing software plays a critical role in reducing errors that ultimately lead to rebilling while also making the correction process more efficient when rebilling is required.

Real-Time Validation

Automated billing software often incorporates real-time data validation. It reads the details of an invoice for inconsistencies and errors as it’s being created, rather than after the fact.

Based on product information (SKU, configuration, and other custom fields preset in the billing platform), it checks item prices, quantities, and customer information against a database and flags discrepancies before the invoice is even sent. It can also incorporate rules-based logic to apply discounts, fees, and taxes to certain scenarios automatically.

Automated Reconciliation

Invoices are often linked to specific payment methods — credit cards, bank transfers, etc. Smart billing systems use automated reconciliation features to match payments with their respective invoices.

Reconciliation tools detect errors like double-billing, mispriced items, and incorrect customer information (or, in many cases, prevent them altogether). They alert the billing team immediately when something is wrong and advise on how to correct it. That way, customers don’t need to take extra steps to file a dispute or contact you about an incorrect invoice.

Tracking and Reporting on Both Ends

If a rebill is required, these systems often facilitate quick modifications to existing invoices, preserving a record of the original document for auditing purposes while efficiently generating a new, corrected invoice. Most tools even allow for automated communication between parties, sending notifications if an invoice has been adjusted or voided. In that sense, billing software keeps customers in the loop and improves the customer experience.

Subscription Management

There are a few inherent challenges with subscription billing. For one, subscription cycles often differ from one customer to the next. Some customers may have monthly billing cycles, and others might be charged quarterly or annually. Since they all subscribe on different days, everyone will receive their bill at a different time.

It’s also harder to change the price or offer a refund for a subscription service since the customer typically pays a flat rate at their billing cycle’s start. If the company offers tiered pricing, this problem becomes even greater.

Billing software helps companies manage their subscribers’ billing cycles automatically. It can apply discounts or credits when it needs to, which makes it easier on the billing department when a customer reaches out with an issue.

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