1. Poor data integration

Many utility collections teams operate with outdated systems that struggle to efficiently manage customer data, billing cycles, and payment information. These legacy systems often lack the flexibility to adapt to changing regulatory requirements and customer behaviours. Additionally, integrating data from various sources (e.g., smart meters, customer portals, payment gateways) can be a significant hurdle, making debt collection harder.

2. Lack of real-time data and predictive analytics

The absence of real-time data on customer consumption, payment patterns, and financial situations makes proactive debt management difficult. Without accurate and up-to-date information, it is difficult to identify customers at risk of falling into arrears and implement timely intervention strategies. Predictive analytics, which can help forecast customer behaviour and potential payment issues, is often underdeveloped in the sector.

3. Limited customer communication and engagement options

Effective communication with customers is crucial for preventing and resolving debt issues. However, many utility companies struggle to manage clear, timely and personalised messages across all channels. Due to a lack of centralised channel management, they find it especially hard to ensure cross-channel consistency.

Additionally, the complexity of utility tariffs and billing information can confuse customers, leading to payment delays and disputes.

4. Poor automation and process efficiency

Manual collections processes are prone to errors, delays, and inconsistencies, which reduce the efficiency of debt recovery efforts. Automated solutions that can handle routine tasks like sending reminders, processing payments, and escalating cases when necessary are essential but often under-utilised due to existing system constraints.

5. Risk of regulatory non-compliance

The utility sector is highly regulated, with stringent rules governing how companies can pursue debt collection, especially for vulnerable customers. Ensuring compliance with these regulations while effectively managing collections is challenging. Companies must be flexible and responsive to new regulations, which can be difficult with outdated or rigid collections systems. This includes implementing capabilities for monitoring, reporting, and auditing debt collection activities in line with legal requirements.

Moving forward – solutions for optimised debt collection

There are two options to resolve system-related problems in utility collections. 

One option is to work with a collections software supplier to address your biggest challenges first. This could involve integrating a digital self-service solution to help manage inbound demand and relieve agents from routine tasks. You might opt to enhance customer affordability management and introduce automation to manage income and expenditure assessments and follow-up. 

The second option is core collections system replacement, which will have to happen sooner rather than later. Fortunately, with real-time cloud collections software, there are ways to avoid a big band style changeover, ensure migration is controlled, and minimise the impact on day-to-day operations. With changes in the way software is delivered, return on investment is swift, new functionality is available quickly and enhanced results can be realised from day one. Furthermore, cloud software is easy to evolve, so future enhancements will be easier and minimally disruptive.

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However you choose to overcome your particular system challenges, Flexys can help you find a solution that suits your organisation. 

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