Cycle billing – should we or shouldn’t we…?

Has your utility grown to the point where you’re wondering if you should move from billing all your customers at one time to cycle billing?

Traditionally, utilities have made the move to cycle billing for one of three reasons. Let’s examine each of these reasons…

More balanced workload

Perhaps the most common reason for moving to cycle billing is an attempt to balance the office and staff workload.

Does your office get slammed with customers coming in to pay on the due date and cut-off date? If you’ve done all you can to reduce walk-in payments and the number of customers in your lobby on the due date is more than your office can manage, it’s probably time to consider cycle billing.

Billing twice a month, as compared to once a month, means half the volume on each due date and half the cut-offs on cut-off day. This is extremely helpful for smaller utilities with limited field staff to perform cut-offs and reconnects.

Length of time it takes to read meters

Another frequent reason for moving to cycle billing is the number of days it takes to read meters. In an attempt to minimize the days of exposure, many utilities have realized that billing more frequently than once a month makes sense.

However, as automated meter reading systems become increasingly popular, and more meters can be read in less time, this makes a less compelling case for cycle billing.

Improved cash flow

The third reason for moving to cycle billing is improved cash flow. The more frequently you bill, the more spread out your influx of cash will be.

This is especially true for utilities that bill less frequently than monthly. For example, utilities that bill bi-monthly often bill half their customers one month and the other half the next month. This provides a more steady cash flow from month to month.

Is it time to consider cycle billing?

Does one of the above scenarios describe your office? If it does, and you aren’t sure if cycle billing makes sense or not, please give me a call at 919-232-2320 or e-mail me at to learn how a business review could assist you in evaluating the pros and cons of cycle billing.

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© 2013 Gary Sanders

How can I reduce my office workload?

We’ve recently examined ways to reduce walk-in payments in your office. If you’ve tried all the things suggested in that article, but your office is still busier than you’d like it to be, here are a couple other suggestions to decrease the workload on your office staff.

Are you still manually entering mail payments?

In most utility offices, mail payments represent the largest volume of payments received. If you are still keying in each mail payment, it might be a good idea to look into a remittance processing system.

Remittance processing systems allow you to scan the bill stub and check, reducing the amount of time required to process mail payments. The system produces an output file which can be imported into your billing system, completely eliminating the need to key each payment. Remittance processing systems are also capable of producing a remote deposit capture file allowing you to deposit checks electronically.

One step above a remittance processing system is a lockbox service. With a lockbox, you don’t even have to open the mail – your bank handles the entire process from opening mail to depositing the checks. All you have to do is download and import a payment file from the bank each day.

Online banking checks

The biggest complaint I hear from utilities about processing payments is dealing with online banking checks. You know what I’m talking about – those checks that arrive a week or more after your customer went online to pay his bill and thought you would receive his payment the next day.

The problem, besides the length of time it takes to receive the checks, is that they arrive with no bill stub enclosed. If your customer doesn’t have the correct account number in their bank’s online banking software, you have to research each payment to find the account number.

There are solutions that allow you to receive online banking checks electronically. If online banking checks are an annoyance in your office, I recommend you look into one of these solutions.

Do you need help reducing your office workload?

If you are interested in reducing the time it take to process payments, or solving any other customer service issues, please give me a call at 919-232-2320 or e-mail me at to learn how a business review could assist you with the process.

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© 2013 Gary Sanders