Seasoned expert Gary Sanders has partnered together with MuniBilling to help give readers an in-depth look into the world of Utility Billing Systems.
For today's Ask The Expert blog we'll be focusing on Days of Exposure, which is a term Gary Sanders coined. Learn why your Days of Exposure is important, and also how to utilize it to prevent unpaid final bills.
We have a series of webinars coming up and the first webinar is about Days of Exposure. Can you explain what exactly is Days of Exposure?
Days of Exposure is a term I came up with to describe the total number of days of service a customer owes for if they are disconnected for non-payment and skip out without paying.
The higher your Days of Exposure, the more risk you have of the customer’s security deposit not covering their final bill and having to write off the balance if the customer doesn’t pay their final bill.Conversely, the lower the value for Days of Exposure is, the less exposure you have for potential write-offs.
What exactly makes up Days of Exposure then?
There are six components to Days of Exposure:
- Days between meter readings
- Days between reading meters and mailing bills
- Days between mailing bills and the due date
- Days between the due date and when penalty is assessed
- Days between when charging penalty and mailing a final notice
- Days between mailing a final notice and disconnecting for non-payment
I see now that the sum of these six values represents the Days of Exposure. Then what would you determine is a good value for Days of Exposure?
For a utility that bills each customer monthly, I consider 60 to be a target value for Days of Exposure. I have seen a few utilities with Days of Exposure values of less than 60, but they are definitely the exception, not the rule.
On the other hand, I have seen too many utilities with Days of Exposure values approaching, or even exceeding, 100. This is problematic.
So tell us, how does your Days of Exposure algorithm help organizations reduce financial risks associated with final bill?
We will start the webinar by providing participants the opportunity to calculate their utility’s Days of Exposure using a downloaded worksheet. After completing the worksheet, we will review strategies for reducing key components of the Days of Exposure.
We will conclude the webinar with an opportunity for participants to ask Gary questions about their Days of Exposure.
Operational Analysis
Gary's 40+ years of experience in the industry has granted him valuable knowledge for any billing entity. With the wealth of his knowledge you can request an Operational Analysis for your organization from him!
You may be wondering, what exactly is an Operational Analysis? Well, it essentially is when Gary looks through ALL of your systems, and interviews your team, to figure out how best you can improve your billing operations.
Here are a few of your organization's systems that Gary will assess:
- Billing System
- Accounting System
- Metering System
- Service Delivery System
The end goal with this analysis is to figure out how to best save your organization time and money. This could also mean suggesting another company's platform if it's the better fit for YOU.
Gary has hosted his own blog for the past ten years. Some of his more notable credentials is that he has designed, built, implemented, and supported both ERPs and Utility Billing Systems. Thankfully, he's only a hop, skip, and jump away.
