What are your repayment plan policies?

Once again, one of the listservs I subscribe to provided the subject matter for a newsletter. This time it was a town manager asking about policies allowing repayment plans.

Due Date

A previous Utility Information Pipeline described the distinctions between extensions, installment services, and payment arrangements. This issue will examine some of the requirements many utilities impose on customers requesting a repayment plan.

Limited number of repayment plans

Most utilities impose a limit on the number of repayment plans a customer may have within a given timeframe. For example, only allowing two extensions per calendar year or twelve month period.

The rationale for this is, under normal circumstances, your customers should be able to pay their bill by your established due date. Customers who habitually request additional time to pay are abusing the system.

No history of dishonored payment plans

For most utilities that offer repayment plans, failing to honor a previous payment plan automatically makes a customer ineligible for future payment plans. If your customer failed to live up to their agreement, why allow them to take advantage of you again?

Signed agreement

Perhaps the most important part is to require a signed agreement stating the repayment terms and consequences of failing to honor the agreement.

This signed agreement should include promised payment dates and amounts, along with any interest or finance charge to be assessed. As with any legal document, it’s always wise to consult with your attorney when drafting the document.

2017 Utility Fee Survey

The 2017 Utility Fee Survey is still open. If you haven’t already completed it, and would like to participate, please click here to complete the survey. It should take less than five minutes to complete. For an idea of what to expect from the survey, here are the results of the 2015 Utility Fee Survey:

If you have any questions, please feel free to e-mail me at gsanders@logicssolutions.com or call me at 919-232-2320.

I’m hoping for as much participation as possible in the survey, so please feel free to pass this on to your colleagues at other utilities.

Thank you in advance for your participation in the 2017 Utility Fee Survey.

North Carolina Rural Water Association presentation

If you or any of your co-workers or board members will be attending the North Carolina Rural Water Association Annual Conference, please be sure to attend my presentation on Improving Revenue Collections for Utilities this Thursday, May 18 at 8:30am.

If you or someone from your utility does attend, please be sure to introduce yourselves!

Need assistance?

If you’re considering offering payment plans or are unsure if your delinquent account policies are adequate, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help you review your entire office operation.

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© 2017 Gary Sanders

What should your customer service policy include?

Happy New Year!

Let me start by wishing you and yours a Happy New Year for 2017! 2017 marks the 6th anniversary of the Utility Information Pipeline and I look forward to another year of offering insights into how your utility can operate more efficiently and better serve your customers. As always, if you have suggestions or ideas of a topic for me to cover, please email me!

Last issue

The last Utility Information Pipeline included the results from a poll asking if reader’s utilities have a formal customer service policy. It went on to explain why I believe having one is important. I promised this issue would address what should be included in a customer service policy.

Elements of a formal customer service policy

Let’s take a look at some key items that should be included in a customer service policy…

Application for service

For starters, your customer service policy should include what is required of a customer applying for service. What forms of ID do they need to provide? Are they required to pay a security deposit or an application fee?

Security deposits

If you do require a security deposit for new customers, the amount of the deposit should be plainly stated in your customer service policy, as should any nuances in how the security deposit is determined.

Do you charge a different deposit for renters than homeowners? Do you perform a credit check to determine the amount of the customer’s deposit? Do you retain the deposit until the customer leaves or do you refund it for good credit customers? All of these should be clearly defined in your customer service policy.

Rates and fees

Your rates and fees should also be set forth in your customer service policy. In addition to rates for the services you provide, your customer service policy should also include any fees, such as returned check fees or any other fees you charge.

And, of course, be sure to update your customer service policy each time your rates and fees change.

Due dates and disconnection for non-payment

The section most often referred to in many customer service policies is the one dealing with late payments and disconnection for non-payment. Be sure your policy clearly states how the due date is determined and how much the late fee will be if not paid on time.

If your utility cuts off for non-payment, your policy should also accurately describe when an account is subject to disconnection and how the cut-off fee is charged.

Payment options

How many ways can your customers pay their bill? Do you charge a convenience fee for credit card payments? Can your customers pay their bill online? What must your customers do to sign up for bank drafts? All of these questions should be answered by your customer service policy.

Budget billing

Does your utility offer budget billing? If you do, your customer service policy should explain the details of how the monthly payment is calculated and the requirements for customers to sign up for budget billing.

Disputed billings

Your customer service policy should outline what options are available to customers who believe their bill was incorrectly calculated. It should also describe the details if you offer leak adjustments or summer sewer adjustments.

Do you have a formal customer service policy?

If your office needs assistance developing or updating your customer service policy, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help.

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

© 2017 Gary Sanders

Why don’t you have a formal customer service policy?

The last Utility Information Pipeline included a poll asking if reader’s utilities have a formal customer service policy. Here are the results of that poll (clicking on the chart will open a larger graphic in a new window):

Poll results

Surprisingly, half of the utilities who responded do not have a formal customer service policy. Of those that do, two thirds haven’t updated it in a long time, leaving just 17% who have a formal customer service policy and update it regularly.

Importance of a customer service policy

I’ve written previously about customer service policies, but have never written about why I believe it is important to have one.

Everyone knows the rules

A formal customer service policy sets forth your utility’s policies and procedures and lets customers know what is expected of them. It also provides guidelines for your employees to use when evaluating a customer’s situation.

Customers don’t like it (nor should they) when they perceive to be treated differently from other customers. Having a customer service policy insures all customers are treated fairly, including everything from how much of a security deposit they must pay to who is cut off for non-payment.

Staff empowerment

Having a customer service policy, and enforcing it for all customers, empowers your customer service staff to make routine policy decisions. No one likes to have their decisions overturned by their boss, especially if it appears to be an arbitrary or if favoritism is involved.

Employee morale improves when your staff knows they will be supported in enforcing your policies. Customer service representatives are empowered when they know management stands behind them and will treat all customers fairly.

Next issue

Now that you have a better understanding about why having a customer service policy is important, the next issue will go into more detail about what should be included in your policy.

Do you need assistance developing a customer service policy?

If your office needs assistance developing a customer service policy, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help.

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© 2016 Gary Sanders

Poll results and formal policies

The last Utility Information Pipeline addressed deceased customers and included a poll asking if reader’s utilities have a policy regarding deceased customers. Here are the results of that poll (clicking on the chart will open a larger graphic in a new window):

deceased-customers-poll-results

Poll results

I’m surprised to see only one utility has a formal policy regarding deceased customers.

This is the second informal poll I’ve conducted recently with the response of a formal policy being a distinct minority. The other was a poll regarding a policy for accepting loose coins.

Limited sample size

The deceased customers poll had 16 responses and the loose coins poll had 22. Statistically speaking, neither of these are very large samples, but, across my readership, I would like to think they are a representative sample of small and mid-sized utilities.

The current subscriber count for the Utility Information Pipeline stands at 322 and, in a good week, about 40% percent of subscribers open any particular issue. So that means, for any given issue, I can expect my newsletter to reach about 125 subscribers. Add to that a few views of my blog from followers on Facebook, Twitter, and LinkedIn and the number of readers responding to either poll is still significantly below 20% of those it reaches.

Importance of a formal policy

I’ve written previously about the importance of having a formal customer service policy. With so few responses to the two polls indicating these topics are addressed in a formal policy, this leads to one of two conclusions: (a) these utilities don’t have formal policies or (b) these topics aren’t covered in their existing formal policies.

If your utility has never been confronted with a customer dumping a huge pile of change on the counter to pay a bill, I can understand if accepting loose coins isn’t dealt with in your policy. However, with the requirement for each utility to have a Red Flags Rule policy, not having a policy regarding deceased customers is more surprising.

Do you have a formal customer service policy?

Does your office have a formal customer service policy? Please take this quick poll.

Once you’ve taken the poll, you can see the results to see how other utilities responded. I’ll publish the final results in the next issue.

Do you need assistance developing or updating your policy?

If your office needs assistance developing or updating your customer service policy, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help.

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

© 2016 Gary Sanders

How do you handle deceased customers?

One of the listservs I subscribe to has had several questions posted regarding deceased customers and how other utilities handle the account of a person who has died.

Grave

Some utilities (generally smaller ones served by a single local newspaper) monitor the obituaries to see if any local deaths are utility customers. Why would that matter, you might ask?

Prevent identity theft

If you remember, one of the reasons for a Red Flags Rule policy is to prevent and mitigate identity theft.

In some cases, a utility bill in the customer’s name can be used as proof of ID. If a family member of a deceased customer were to move into the home and continue the service uninterrupted, that could be the first step in assuming a false identity. Insuring the account is transferred into the name of the executor or other living family member prevents any chance of that happening.

Protect against bad debt

Depending on the laws in your state, continuing to send a bill to a deceased person may prove to be difficult to collect if it goes unpaid. Therefore, transferring the account into the name of another living person is important.

Adequate security deposit

Additionally, if the deceased person was a longtime customer, they might have had a much smaller deposit (or even no deposit) than a customer applying for service today. Without an adequate security deposit, if the family member taking over the account proves to be habitually late paying, you could end up stuck with bad debt when they leave or sell the property.

Therefore, requiring the person who inherits or otherwise assumes responsibility for the property to apply for a new account is the safest policy.

Do you have a policy regarding deceased customers?

Does your office have a policy regarding deceased customers? Please take this quick poll.


 

Once you’ve taken the poll, you can see the results to see how other utilities responded. I’ll publish the final results in the next issue.

Upcoming aging workforce seminar

Don’t forget the Aging Workforce Issues – Best Practices Panel & Luncheon seminar on Wednesday, November 30 from 11:30 am to 1:30 pm, sponsored by the Utility Management Committee of the NC AWWA-WEA.

If you are located within driving distance of the University of North Carolina at Chapel Hill, I encourage you to consider attending in person. If not, you can still participate in a live webcast of the seminar.

The seminar moderator is J.D. Solomon, PE, CRE, CMRP; Vice President of CH2M. The panelists are:

  • Rod Dones, Organizational Development & Learning Specialist, Charlotte Water
  • Tamara Byers, Human Resources Manager, Charlotte Water
  • Ed Kerwin, PE, Executive Director, Orange Water & Sewer Authority
  • Kenny Waldroup, PE, Assistant Public Utilities Director, City of Raleigh
  • Matt Bernhardt, Director of Public Works and Utilities, City of Gastonia

For more information, or to register for the seminar, please click here.

Do you need assistance developing a policy?

If your office needs assistance developing or updating a policy regarding deceased customers, or any of your other policies, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help.

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

© 2016 Gary Sanders

How do you handle petty cash purchases?

Recently, we were in the process of implementing a new customer on Logics’ Utility Management Software when one of our trainers called with a question. It seems this customer doesn’t maintain a petty cash fund and, instead, reimburses employee purchases from the cashier’s daily collections. Our trainer wanted to know how I suggested handling this.

cash-box

Petty cash policy

My first response to our trainer was to convince the customer to discontinue using the daily cash till as petty cash and establish a petty cash fund. Having a petty cash fund provides better cash controls and oversight as to what is spent.

Here are some key elements of an effective petty cash fund policy:

  • Establish a petty cash fund just large enough to cover the volume of cash purchases
  • Impose a dollar limit on petty cash transactions
  • Appoint one person as the petty cash custodian
  • Store petty cash fund in a locked cash box or small safe
  • Document all disbursements with a petty cash voucher and receipt for the item(s) purchased
  • Reconcile and reimburse the petty cash fund at least monthly, but more frequently if needed
  • Conduct periodic, spot audits of the petty cash fund to insure money isn’t being “borrowed” and replaced later

Alternative to a petty cash fund

Purchasing cards (p-cards) are an excellent alternative to maintaining a petty cash fund. P-cards allow your employees to make purchases at any establishment that accepts credit cards. Most purchasing cards allow the issuing organization to limit where and for how much the card can be used, providing effective purchasing controls.

If you’re interested in more information about p-cards, here is a link to the Government Finance Officers Association’s Best Practice for Purchasing Card Programs document.

Petty cash poll

How do you handle petty cash transactions? Please take this quick poll.


 
Once you’ve taken the poll, you can see the results to see how other utilities responded. I’ll publish the final results in the next issue.

Is your office operating efficiently?

If your office doesn’t have a petty cash fund policy, or doesn’t seem to be operating as efficiently as possible for another reason, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com for more information about how a business review could help improve your operation.

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

© 2016 Gary Sanders