Surprising poll results

If you read the last Utility Information Pipeline, you know it included a poll asking how many days after cut-off you wait before closing accounts that haven’t paid. Based on the results of that poll, it was clear the choices way underestimated how long most utilities waited. As a result, I sent an e-mail last week with a revised poll that increased the maximum choice from 10 days or more to 21 days or more.

Revised poll results

Thank you to those of you who participated in the revised poll. The new poll had more than twice as many responses as the first version. If you missed it, you can still participate in the poll by clicking here.

Here are the results of the revised poll (clicking on the chart will open a larger image in a new window): RevisedPollResults

Still surprised

I’m very surprised that two-thirds of the responses wait three weeks (or more) to finalize an account that is off for non-payment and hasn’t paid. Understandably, some utilities have policies where there always has to be an active account receiving a bill – even if the property is vacant. For these utilities, and those where only property owners are billed, accounts are never closed until the property is sold.

Why wait?

For utilities without such a policy or that bill tenants, why wait so long? By final billing the account, you are able to apply the customer’s deposit and offset any potential bad debt. The sooner you do so, the sooner the customer’s deposit becomes an asset for you, rather than a liability. If you represent one of the utilities responding with 21 days or more, I would be interested in hearing why you wait that long. Have you seen cases where customers show up more than three weeks after being cut off and finally pay? Or is this just something that isn’t a priority? Please feel free to send me an e-mail or comment on this post to explain why you don’t close cut-off accounts sooner.

Is it time to review your cut-off policy?

Has it been a while since you’ve reviewed your cut-off policy? Please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn more about how a business review could assist with reviewing your policies and procedures.

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© 2014 Gary Sanders

How long before you close a cut-off account?

Recently, I was surprised to learn of a customer with accounts that had been cut off for non-payment who were still off for non-payment when the cut-off list for the following month was being prepared.

How long do you wait before closing cut-off accounts?

Have they skipped out?

Experience shows that customers who don’t pay (or try to make arrangements) within the first day or two of being cut-off generally aren’t going to pay and probably are no longer living there. If your customer has skipped out on you, why wait to close the account and apply their deposit?

Waiting a few days to close the account, in case your customer is out of town, makes sense. But certainly a month is much too long to wait.

Code violations

In some localities, a residence without running water is considered uninhabitable and poses a building code violation. If this is the case in your jurisdiction, be sure you follow all local ordinances concerning cut-offs and reporting requirements if it appears someone is still living there after being cut off.

Charge a higher deposit

If they do come back to have their service restored after you’ve closed their account, be sure to charge an adequate security deposit. If you have a variable deposit policy, based on the customer’s credit, they should pay your maximum deposit after being cut off for non-payment.

Quick poll

How many days after cut-off do you wait before closing accounts that haven’t paid? Take this quick poll and see how your utility compares to others.

Is it time to review your cut-off policy?

Has it been a while since you’ve reviewed your cut-off policy? Please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn more about how a business review could assist with reviewing your policies and procedures.

Click here to subscribe to my free, bi-weekly e-mail newsletter...

© 2014 Gary Sanders