Diagnostics identify debt management changes for challenger worth £13m in year one

Challenge

Our client, a leading challenger brand in the UK residential energy market, has appointed a new board because the business’ commercial position was suffering due to legacy debt.

It needed a clearer analysis of its debt position, along with a thorough assessment of processes and performance levels.

BFY Group were selected to help the board make effective and informed changes that would drive the business forward at pace.

​Solution

 

A deep dive into key debt metrics was conducted as part of a comprehensive benchmarking project to assess our client against its competitors.

A complete analysis of the client’s debt book was undertaken, with full segmentation of its customer base, enabling us to gain a thorough understanding of customer groupings.

A comprehensive forecast of bad-debt charge was completed to validate likely in-year outturn vs budget and to inform future budgeting.

A complete review was carried out into debt resolution systems, processes and performance, as well as looking at the quality and size of the collections department, allowing us to identify significant opportunities to achieve an improved debt position.

We reported our identified insights and countermeasures in a clear way that helped our client understand how the initiatives we outlined would help it transform its debt position.

Results

We identified that our client’s debt position was up to 4.5 times higher than that of comparable competitors.

 

Our insight identified a series of customer segments requiring tailored approaches, including customers who had never paid, those with significant arrears and those with an insufficient payback period.

 

BFY Group provided the client with seven ‘must-do’ initiatives, which created opportunities worth between £9m and £13m in the first year.