For a utility, the meter-to-cash revenue cycle doesn’t always move as quickly as it could. High customer turnover rates, outdated billing methods, and high customer standards for billing transparency can all slow down the cycle that leads to a successfully processed payment.
In the sections below, we’ll define the revenue cycle for utilities and cover the best strategies for improving revenue cycle speed and efficiency.
What Is the Revenue Cycle?
“Revenue cycle” is the term businesses use to describe the series of events that lead to receiving payments from customers. Revenue cycle steps for utilities include calculating and sending a bill, receiving a payment, and depositing the payment.
For utility providers that bill based on usage (electricity, water & wastewater, and natural gas), the revenue cycle is known as meter-to-cash, or M2C.
The M2C revenue cycle consists of these recurring interactions between a utility and its customers:
- Providing service
- Metering (meter reading and data validation)
- Billing (calculating charges, preparing and sending invoices)
- Collection (receiving and processing payments)
Delays, inefficiencies, and errors in the revenue cycle result in higher costs and greater demands on staff. Therefore, utilities aim to complete these steps as quickly and efficiently as possible.
Optimizing the M2C cycle leads to faster access to funds, less resources devoted to payment chasing, and more accurate, current financial data.
How Utility Companies Speed Up the Revenue Cycle
Utilities use customer engagement software to reduce paper-based communications, streamline account changes, and simplify billing and collections. Ultimately, these improvements speed up the revenue cycle. Here are a few strategies for optimizing the M2C process.
Easy Self-Service for New Customer Agreements and Account Changes
A customer self-service portal equips customers to complete certain tasks without the assistance of a customer service representative. Basic self-service options for utility customers typically include viewing bills and submitting payments. More advanced self-service tasks include:
- Accessing detailed usage data
- Scheduling service appointments
- Accessing automated chat support
- Completing new customer agreements and making account changes
With self-service, customers can complete account-related tasks 24/7. This is especially helpful for changes such as completing new customer agreements or changing the customers listed on an account. Without self-service, these processes may take days to complete, thus slowing down the revenue cycle.
Improve Paperless Billing Adoption Rates
Conventional paper-based billing involves printing a bill, mailing it, and then waiting for it to be received and paid. The process is slow, expensive, and error-prone. Reliance on paper billing is associated with slower revenue cycles.
Paperless e-billing speeds up and simplifies the payment process. Customers can pay e-bills as soon as they become available through a self-service portal. This eliminates the wait time of two separate mail cycles (the customer waiting for the bill and the utility waiting for the payment).
E-billing benefits include:
- Accelerating the revenue cycle
- Reducing costs associated with printing, mailing, mail errors, and replacing lost bills
- Reducing administrative workload associated with paper bills
E-billing has been widely used for many years, but some customers still need a nudge to make the switch. Utilities can encourage e-billing adoption by offering incentives, such as a one-time bill discount for customers who try paperless billing for the first time.
Enable Pre-Authorized Payments
While e-billing speeds up the revenue cycle, enabling pre-authorized payments offers even greater speed and efficiency.
Pre-authorized payments are recurring, automatic payments from a customer to a service provider. If a utility customer has opted in to pre-authorized payments, the utility can withdraw payments whenever they’re due. The customer doesn’t need to take any action to pay their bills.
Pre-authorized payments result in faster collection times for utilities. This method is also a benefit for customers, simplifying their payment process and reducing the risk of late payments.
Improve Revenue Cycle Management at Your Utility
At silverblaze, we provide utility companies with a customer engagement platform that expands self-service options and reduces revenue cycle wait times. Our smart software solutions make life easier for customers while improving efficiency and financial outcomes for utilities.
We work with more than 140 utility customers, processing over 52 million transactions every day of the year. Our solutions increase customer satisfaction, reduce call volume, and help utilities provide more helpful, transparent customer service. If you’re interested in improving customer engagement and optimizing the revenue cycle at your utility, silverblaze can help. Schedule a software product demonstration today to learn more.
