Customer Management System
There are tons of systems out there trying to improve business processes of utility companies in general or electric companies in specific.
The key is still doing the re-engineering process well and the application system will just a tool to follow the processes. I put some of my thoughts about Electric Management System in this blog. Feel free to read and comment.
Previous post was discussing about paying the electric bill with credit card. The idea is to make a payment before due date to avoid the hassle of disconnection done by the electricity company. Recent movement of electricity companies is to shorten the due date to collect money faster. It is a strategy to reduce the commercial cycle (reading-billing-collection). Aside from collecting money faster, they tend to do the disconnection as soon as the due date is past. This is to reduce the commercial loss of giving electricity to non-paying customer.
Paying with credit card could be convenient but when your credit card gets the limits, and you are facing with the approaching deadline of paying your electricity bills, there are other alternative for paying the bill.
Try to get cash advance could be a solution. In the end, you do not need to loan much money just to cover your electricity bill payment. There are much institution that could offer payday loans. Some could offer an online approval that is very convenient as compared that you need to submit the application form by coming to their office. Once approve, the money is wired directly to you savings account.
Paying Electric bill with cash advance is similar to paying it with cash. Once you got the money, you could either
Paying electric bill is something routine that we need to do it every month. Well, it depends on your electric provider whether they are issuing the bill monthly or quarterly. If you noticed, every years, the electric company becomes more strict in deadline of payments. If you pass the deadline without paying the bill on time, in 1 or 2 days, you will get a notice of disconnection right away. Disregarding this notice will lead into disconnection electricity.
As electricity becomes an important part of our life, we do not want the disconnection to happen. That is why I am suggesting you to enroll your electric bill payment through credit cards. You can avoid the hassle of going to payment center or ATM every month to make a payment of your bill. However, you must check with your credit cards providers if they have setup up an agreement with the electric company to do payments through credit card. If you are not sure about it, you can always look for credit cards review available. You try to compare the providers that will fit best to what you need. Some credit card providers even give a cash back when you are using it for payments, including the payments of electric bill. In the end, it is just like having a discount by paying your electric bill through credit cards.
Online payment for billing system in general or utility billing system in specific requires a defined business process to ensure all financial statements are correct and good data integrity.
Online payment could be handled in several ways, namely:
- Online payment through website. This requires coordination for any payment gateways or banks to receive payments using credit card and/or bank transfer.
- Online payment through ATM. A collaboration with banks is needed.
- Online payment through cell phone. A collaboration with mobile service providers are needed.
- Etc.
One of the benefits of online payments methods above is that customers can pay at their convenience and they can do it 24 hours a day, 7 days a week. However, All payments mentioned above should be treated “offline” by billing system. What does it mean? Why Online payment should be treated “offline”? What I mean is that outside or third party should NOT be allowed to access and updated the billing system online/directly. This is important to ensure billing system data integrity and security.
All online payments should be stored in a file or separated database for further processing during batch process. Thus, these payments are treated “offline” similar like payments in the offices that do not access/LAN to billing system.
Utility company oftens has a deal with third party to recieve bill payments. The the passing of data is done online, there could be cases where when the payments are going to be applied, the bills in utility system has been altered (rebilling) or paid (double payments). This payment is considered as erroneous collection.
One way to reduce erroneous collectin is by applying the payment into customer's credit. This credit will be compensated to the next bills.
However, some scenarios can still generate erroneous collections. If the third party is allowed to enter the bill ID or customer ID in the payment file, then, there is a possibility that the bill ID or customer ID is inputted wrong. The system of utility company will not know where to credit this payment. To avoid this kind of problem, it is better if the utility company forced the third party collections to use barcode when receiving payments. Utility company will issue bills with barcode or customer ID card with barcode. Everytime, customer wants to pay the bills, he just need to show the customer ID card or the bills. This method will reduce the erroneous collection greatly.
Reading - Billing - Collection is a normal Commercial Cycle for Utility Company. The duration to complete one full cycle is important for the cash flow of the company. The lesser it takes, the faster that the money can be collected over the consumptions used by customers.
Old fashion Utility company often forget the important of short Commercial Cycle Duration. Let us say that the electricity company produces a bill monthly. Most of the old fashion utilities company will spend the whole month reading customer's meters, resolve some anomalies/exceptions and bill all the services at the end of the months. By doing this, the company has an average of 15 days for its commercial cycle.
Why? Because the customers read on 1st day will get their bill on the 1st day of next month, while the customers read on 30th day will also get their bill on the 1st day of next month. Thus, the average will be 15 days more or less. What does 15 days commercial cycle means? It means that in average, that electric company will collect the money 15 days after the customers have consumed the electricity.
For us, it might not mean a lot. But for an electricity company whose revenue is million and million of dollars, this 15 days delay means something. Upper management of utility company should start thinking the best way to reduce the commercial cycle. One ideal set-up is to have daily cycle, where the customer is read and at night, the bill is produced and ready for delivery and collection the next day. This case, the commercial cycle will be reduced into 1 day. This is assuming that there is no anomalies or exception on that bill.
Reducing commercial cycle is not an easy task as it will affect the core business process of utility companies. In depth analysis and study should be paid attention to understand the risk of implementing the changes. Customers can be affected as well if they are not properly informed. Always put a team for change management to do this kind of task.
