In the world of telecom Expense Management (TEM), wireless devices present unique challenges. Here is one scenario: Employees purchase their own cell phones, which they use, both for personal and business calls. The company figures out some fixed allowance to reimburse them. There are several problems with this. One is that one size does not fit all. Some sales reps might be heavy cell phone users, almost exclusively for business use and would have to pay for company calls out of their own pockets, while others would use their cell phone mostly for private calls.

Besides the unfairness, there is another problem with this. The IRS considers private use of a company-paid cell phone to be taxable employee income and thus needs to be reported as such. While it is possible to keep track of which calls are personal and which are business-related, it would be an accounting nightmare to keep track of thousands of cell phones that way, each of the cell phone users being reimbursed a different amount each month.

Another possibility is for the company to purchase the mobile devices for the employees, strictly for business only, and paying their phone bills every month. Aside from the employee’s inconvenience of having to carry two cell phones and the company’s inconvenience of paying a phone bill for every cell phone-issued employee, there is the added fact that it is very expensive to pay for individual plans.

One way to cut costs is to use rate pools, where the company pays a lump sum amount for all its cell phones combined. While this appears to be a good deal, there is yet another problem. For example, cell phone users might get an average allowance of 700 minutes per month for $50, which works out at about 7 cents per minute. That is a good per-minute price, but only if they use the 700 minutes and no more. If they use 250 minutes, it works out to 20 cents per minute and if they exceed the 700 minutes they might get charged a hefty 40 cents per minute.

According to the Aberdeen Group, wireless services and equipment cost about 10 times as much as wireline. So this is an area well worth controlling. While many companies are aware of the need to manage wireless telecom costs, they often don’t know how to go about it.

While telecom expense management for wireless services is more difficult than for wireline, TEM providers are developing methods to track and control wireless telecom costs. Features like rate optimization have come into being, where the system obtains usage data from the carriers and recommends the best available rate plan. By keeping track of inventory, the system can help insure that cell phone privileges for employees who leave the company are discontinued immediately.

Companies that are not yet effectively managing their wireless telecom and cell phone costs may find it advantageous to contact a reputable telecom expense management system provider for recommendations on how to proceed. It can make a vast difference in their bottom line.