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KPI of the Day – Utilities: # Reconnected utility service after payment

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utility service

Definition

Measures the number of households reconnected to the utility service (gas, electricity, hot water, sewage, or waste collection) after being initially disconnected for nonpayment.

Purpose

To indicate the customers’ level of compliance with the payment procedures and policies.

Recommendations

On the one hand, high levels of this KPI show that bills became actual revenues for the company, but on the other hand, it reflects slow cash collection and unreliable clients.

It is particularly interesting how KPI results for this indicator can indicate either an increasing revenue from the collection of utility bills or a concerning number of customer faults on their scheduled bills. Service disconnection, in general, may also be caused by failure to comply with the terms of deferred payments, deposits or credit arrangements.

In order to be disconnected from a utility service, the customer must be at least one month behind in payment, circumstances which may also lead to contract termination and total disconnection from service.

Re-connection to utility services can be achieved in line with the policies of the organization and can otherwise require a service fee for full restoration. Either way, reconnected utility services can reflect on the integrity and reliability of customer relationships.

However, in contrast, # Reconnected utility services after payment can reflect on the efficiency and effectiveness of cash collection efforts and initiatives.

Some recommendations on stimulating re-connections after payment in the utilities industry include the following:

  • Implementing a new payment-system plan, per individual credit score, in order to ensure full bill payment compliance;
  • Monitoring compliance with the general agreements of the utility contract and devising customized payment plans for customers who have a history of delayed payment;
  • Fostering the utilization of an internal tracking system, that reports the payment status of connected customers, as well as centralizes upcoming bill payments.

Targets may not be applicable for this indicator. The level of this indicator is significantly influenced by the total number of customers that have not paid their utility bills.

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