The Utility Billing and Payment System Must Support a Growing List of Use Cases

Utility billing and payment systems must support a growing list of use cases. This includes enabling consumers to make frictionless payments at the device and platform of their choice, reducing costs in the meter-to-cash process, and guaranteeing funds.

Ultimately, these capabilities enable happier customers, reduced bad debt and enhanced organizational cash flow. Here are three ways utilities can meet these expectations:
Real-time information flows

With the need to provide reliable electricity, water, gas and other essential utilities, it is important for customers to have easy access to billing and usage information. This allows them to quickly identify issues that can cause disputes with the supplier and resolve those problems promptly, reducing potential damage to the supply-demand relationship.

A key feature of utility billing systems is the ability to receive meter reading submissions and generate invoices based on actual consumption. This is known as live billing, and it enables utility suppliers to improve cash flow by reducing the time between statement generation and customer receipt of invoices.

Using an automated billing system also reduces manual data entry and processing costs by sending EDI files on a regular basis. In order to process these EDI messages, you must maintain the appropriate bill payment instructions for each customer on a daily basis. To do so, select a customer and click the adjoining button to invoke the ‘Utility Bill Instruction Capture’ screen.
Request to Pay

The demand for request-to-pay features is robust worldwide as they offer significant capabilities and cash flow efficiencies for consumers, businesses and utilities. To be successful, however, these features need to work harmoniously with real-time payments systems.

One solution to this is Request to Pay, which offers two-way digital communication between a biller and payer for invoice payment through existing account-to-account direct real-time payments infrastructure. It is a secure, account-to-account service that can be implemented in different ways including as an overlay scheme like PSD2’s payer -payee direct model or as a true aggregator solution which uses the API of a wallet provider.

The latter model allows a utility company to instantly inform its customers of an invoice payment and the amount due. This can drastically reduce the amount of manual admin required and improve payment conversion rates on bills. It also provides greater flexibility for consumers who are self-employed or on zero-hours contracts, and can help them avoid late or missed payments by providing peace of mind that their bills will be paid when it suits them.
Convenience for consumers

The utility billing system enables consumers to pay their bills through a variety of means. Aside from the traditional credit and debit cards, utilities also accept ACH payments and even online banking transfers. Consumers can also opt to receive electronic statements and to get alerts through their phones or email if the payment is not successful.

The National Consumer Law Center doesn’t have a formal position on convenience fees, but Harak said the group does oppose utilities that charge them for paying with plastic because those fees burden low-income customers. The group also fears that utilities will simply pass on the cost of processing those fees to their customers by raising rates.

In order to avoid those costs, the utility billing system lets companies eliminate third-party processing services and incorporate their fees into the overall bill. One example is the Modesto Irrigation District, which stopped using Western Union Speedpay about six years ago and blended its card-processing fees into its rate schedules.
Liquidity management

A key challenge for many utilities in the wake of margin-related liquidity pressure is to manage their treasury and risk processes. Historically, these have focused on market and credit risk while deprioritizing liquidity management and analysis. Without accurate, holistic and automated liquidity forecasts, treasury and risk managers cannot deploy tools quickly enough to mitigate short-term impact or restructure businesses for longer term resilience.

In addition, a fragmented collection of financial data across multiple software tools leads to manual reporting that takes up unnecessarily valuable time and exposes institutions to more human error. Automation enables real-time reporting that is up-to-date and easy for top management to digest.

In the short term, this will support tactical solutions like redeploying cash to reduce borrowing costs; in the long run it will facilitate structural portfolio adjustments that lower risk capital consumption. But all these actions need visibility, which can only come through strong liquidity management and utility payment systems.