Utility Collections Tactics
To Improve Utility Debt Collections

Utility collections are becoming a greater priority, and utility companies all across the country are stepping up their collections activities. Some factors contributing to this are an economic downturn and recession, as well as tighter, vanishing credit markets and other sources of capital for municipalities.

Utility companies are finding it necessary to employ improved strategies to help combat these rising utility collections.

Here are some suggestions we offer to many of our utility clients, which have yielded better results.

• Offer payment arrangements to delinquent customers early on, before ordering service disconnections. This will reduce the labor and costs associated with both executing shut-off orders, and subsequent follow up reconnects. By reducing the number of disconnection orders, existing field staff can be given other money-generating duties, like installing appliances.

• Improve internal utility collections processes before sending final bill accounts to third party collection agencies. Call customers early and often, at the onset of problems before they get out of hand. Offer payment extensions or arrangements for accounts in arrears. By following a consistent plan internally, you can lower the number of accounts that need to be outsourced to debt recovery agencies.

• Once in house efforts have been exhausted, then its time to turn those accounts over to a collection agency experienced in utilities collections. These accounts shouldn't go past 60 days before being outsourced, because as more time passes, the harder they become to recover.

More advantages of this "one-source" approach is the significant costs savings. Collection agencies that offer billing services can offer huge savings to utility companies in mailing and processing costs over standalone billing companies. Because of their large mailing volume, collection agencies can negotiate substantial discounted mailing rates, and can pass these savings on to the utility company. Traditional billing services can't compete against these kinds of discounts, as the cost of handling and mailing statements is a large part of their expenses.

Another advantage to a one-source billing statement-collections agency combination solution is that it offers you the ability to advertise additional services or products, via marketing insertions, to your customer base, many times at little to no additional expense, since collection agencies have and operate bulk mailing processing facilities to daily mail thousands of collection demand letters. You can use this to market additional services and generate more revenue.

Collection agencies also have the ability to report delinquent customers to the three credit bureaus. Standalone billing companies can't report to credit bureaus. This can be a great incentive and will improve your utilities collection. Customers fearing the damage to their credit rating for past due accounts can be encouraged to pay their debts.

For more information on outsource billing services, click here.

The point is that by taking a more proactive approach, implementing consistent systems, and addressing these collection problems early on before they become more expensive ones, as well as knowing when to quickly outsource problem accounts, will help utility companies operate more efficiently and profitably.

If you would like a utility collections quote, fill out the quick form below. One of our consultants will contact you shortly.