Market liberalization, growing competition in the industry, and the economic crisis of households and businesses have deeply affected the
utilities
Italy and Europe over the past decade.
Unpaid bills now pose a real threat to companies in the industry reaching the 4 billion euro mark annually. A financial hemorrhage that reduces Utilities’ purchasing power and resources to invest in innovation, customer services and infrastructure.
Yet, rather than a weakness, credit may become the key asset to focus on as we face increasing competition in the free energy market. A
forward-looking management of the credit process
can, in fact, be a discriminating factor in enabling Utilities to preserve revenue to invest in new services that strengthen user engagement and retention strategies.
In the face of this scenario, the opportunity to continue to compete in a hyper-competitive market and to achieve adequate levels of profitability will depend on the ability of companies to make the business processes of the
Credit Area
in a governance logic.
The above highlights the limitations of traditional credit management tools and sets the stage for an ‘important process evolution focused on constant monitoring of
the entire credit cycle
. Two new priorities: managing
all
different stages of credit and intervene
in a timely manner
on bad debts before they become uncollectible.
New technologies to date in the market help utilities manage credit by automating the entire process, from billing through the out-of-court and court phases, with significant benefits:
- Acceleration of cash flows
- KPIs improvement (DSO, % expired)
- Improved know-how and governance of practices
- Automated process governance
This post is also available in: Italian
Rhenus: Speed of new customer integration: The key to successful logistics
