The last few months have seen increasingly turbulent times for energy suppliers, culminating in two suppliers shutting up shop in the previous few months alone.
Wholesale energy prices have rocketed through the cold winter, and the continued changes to routine and activity with the various stages of lockdown have created greater uncertainty. But it would be wrong to assume that it’s just the volatility of wholesale pricing or shifts in energy consumption caused by working from home that are purely responsible for the difficulties being experienced by energy suppliers.
When the UK went into the first lockdown in early 2020, with all workers sent home from offices, most of us assumed that things would soon be returning to normal, and we’d be back at work within weeks, if not a couple of months. But as the year went on and the COVID rollercoaster continued, it soon became apparent that this was a period of unprecedented and long-term change. In those chaotic first few weeks, many suppliers struggled to get their teams working efficiently from home. Some took advantage of the government help and furloughed large numbers of back-office staff to relieve pressure on their business in anticipation of constriction to cash flow.
As the weeks of furlough turn into months, Suppliers’ processes and back-office systems are beginning to creak under the weight of a growing number of exceptions and issues that were not being ‘worked’ or identified and fixed, compounded by errors made by small teams under pressure. One of the things that we have learnt over the last few years, is that without constant management and the right resourcing levels, a Supplier’s ability to bill correctly and therefore get paid on time diminishes dramatically as the number of billing issues builds up. As a result, some Suppliers will now be struggling to maintain a healthy flow of correct bills that could be sent out to customers. And as we all know, if you can’t bill, you don’t get paid!
This strategy may well have worked out for the best if everyone had soon been able to return to their roles as expected. However, the ongoing nature of the Pandemic has meant that some Energy Suppliers are now left with escalating billing issues. Throw into the mix an increase in inbound customer contact, driven by growing concern from consumers about rising bills; Suppliers could be facing the perfect storm of ever-increasing inbound contacts and internal billing problems.
So, whilst volatile energy prices and rising customer debt are putting pressure on Energy Companies, it’s the backlog in back-office processes that will cause the most significant long-term issues, as they fight against a growing number of exceptions and corrections needing attention. In energy supply, focussing on the detail can often help to alleviate the biggest long-term problems!
We go into more detail on this subject in our recent Whitepaper – Cash is King. You can read it here.