Industries / UTILITIES

Collections Optimization

Improve utility collections to maximize recovery outcomes

Every year, energy and utility companies write off millions in bad debt caused by customers who don't pay their bills. But because electricity is considered a basic necessity, regulatory bodies require utilities to be more proactive with customers before disconnecting services. Plus, utilities are often not allowed to roll bad debts into the rate structure, which can affect shareholder value, the balance sheet and credit rating. Therefore, it's a real necessity to identify and predict when customers may have trouble paying their bills and then develop plans for helping those customers keep their accounts current.

" Although revenue streams in the utility sector tend to be relatively steady, some utilities have already noticed up to 4% reductions. Forward thinking around payment options and debt recovery processing may help manage any potential spike in defaults."

— Top 10 Business Trends Impacting the Utility Industry in 2010, Gartner Research, March 2010


How SAS® Can Help 

Using business rules to help ensure reasonable care is demonstrated for regulatory compliance purposes, collections optimization can increase the ability of utilities to collect from problem payers before disconnection must occur. With SAS, you can:

  • Gain an in-depth knowledge of customers and their behavior by bringing together all relevant data - both internal and external.
  • Understand customer payment abilities, and tailor programs to optimize collections - taking into account regulatory reasonable care demands - by building risk scores for all customers based on credit ratings, usage patterns and payment history. 
  • Proactively engage with customers before problems emerge by using predictive analytics and "what-if" scenarios to test and optimize treatment strategies, and ensure that treatments only suitable for particular customers are implemented at the least cost possible.
  • Optimize workforce constraints using advanced optimization techniques to prioritize high-risk customers and eligible shutoffs based on risk mitigation objectives.
  • Determine the value of customers and the potential financial risk they represent by measuring each customer's value at risk (VaR) using current and predicted future debt and probability of default. Use the resulting information to improve the availability of money to help fund operations, strengthen investments or augment cash flow.

How SAS® Is Different 

Only SAS brings together data management, analytics and reporting in a framework that lets you manage customer debt more efficiently and effectively:

  • Domain expertise. From taxes to telecommunications services, SAS has worked with customers across industries for more than 34 years to improve collections and optimize returns by combining robust data and analytical tools with best-practice understanding, insight and analytical approaches.
  • Superior data management. SAS eases access to standard, trusted data regardless of computing platform or location.
  • Business analytics. SAS provides award-winning analytics and reporting to get the most out of your utility data, so you can make businesses decisions about customers and their associated risk and value based on the facts.
  • Rapid ROI. SAS offers proven implementation plans that can get you up and running in months, enabling you to perform smarter analyses faster than market competitors to develop new customer strategies.

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