Collections improvements deliver ~£5m cash for Water retailer

Jonathan Paton 07 Feb 2024
Written by Jonathan Paton
Jonathan Paton, Senior Manager at BFY Group.

We supported a B2B Water retailer with a series of collections improvements, achieving a cash uplift of ~£5m in five months.

What was our client’s challenge?

The retailer was concerned about meeting performance improvement targets in its debt function.

We identified three areas that needed addressing:

  • ~5,000 Direct Debit (DD) customers were paying less than 90% of the amount required to cover their usage
  • First bill defaults being 3x higher than default levels of existing customers
  • ~8,000 accounts had never paid a bill, despite being in the dunning journey

On top of this, the retailer hadn’t reviewed its customer fees for many years, with increases in inflation meaning they had likely fallen below industry averages.

Why was this happening?

The retailer had one dunning journey in place for ‘finalled’ accounts, and this wasn’t tailored to customer circumstances. We worked with their internal collections team to develop a more effective approach, and diagnose the root causes of their debt challenges.

We found that:

  • Segmented journeys and digital communications were processed manually, not utilising the Debt Management System (DMS) available
  • Making changes to debt journeys was difficult, with no defined process in place

These challenges became the focal point of our project, identifying opportunities for enduring improvements across the debt function.

How did BFY help?

Our client enhanced their collections performance with these initiatives:

  • Automation of DD adequacy, helping to increase cashflow by ensuring customer payments are accurately reflecting their usage
  • Implementation of four new journeys for ‘finalled’ customers, integrated with the DMS to drive bespoke campaigns
  • Mapping of live segmented debt journeys, which helped to reduce debt from failed or cancelled DDs, while setting up the client to implement further improvements in the future

We also reviewed the retailer's customer fees, proposing increases in areas that had fallen below the industry average.

Additionally, a data share feasibility study was completed, as our client had an appetite to utilise this approach, but required guidance on the suitability of their data. Our study gave them clarity on the internal changes required to maximise data sharing, informing their decision on whether to proceed.

What results did this deliver?

Within the first five months of mobilisation, these initiatives drove a ~£5m uplift in cash collections for our client.

From the automation of DD adequacy alone, the retailer is expected to receive an annualised cash uplift of ~£2m.

BFY delivered more than expected as part of this project. The work completed was above expectations with next steps also included to enable us to move forward internally.

Head of Meter to Cash

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Jon specialises in Customer Operations leadership, customer contact, and operational service delivery transformation/improvement.

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