Stephen Jones writing on Billing and Application Migration
The perceived risk (to the biller) of a customer (and their respective billing accounts) will change over their lifetime with the biller. The risk to the biller is that a customer will incur expenses (e.g. external payments the biller must make to others such as phone call settlements), or will delay payment of their bills requiring the biller to 'fund' the customer's debt, impacting both the biller's cashflow and increasing their business expenses (i.e. interest payments).
A new customer without any history with the biller will often be classified as being a higher (credit) risk to the biller because the biller cannot (yet) tell if, how and when the customer will pay their bills. A longer-term customer with a history of payments (in response to bills) can be judged on their actual history, and treated as higher or lower risk accordingly.
When a customer does not pay their bill by the due date, the biller may choose to remind them by making contact in one (or more) of the choices available:
Alternatively, if the customer has not paid their bill after being reminded, and the biller's specific network supports suspension, then the customer might be suspended (withdraw network access) to reinforce the importance of the customer paying their outstanding debt.
Billers can manage their costs and credit management effectiveness by adjusting the actions that are performed, and the timing of those actions. The effectiveness of the different credit management plans that are applied can be tested (e.g. using A/B testing) to find the most effective balance of response and cost.
There is also a need for any response to non-payment to be forgiving (not overact) when a customer's payment history has been otherwise positive, as customers will have an occasional payment go astray.
An alternate approach is to inform the customer (say via a letter) that they have been placed on a shorter, more critical credit management cycle due to their repeated failure to pay on-time. The message to the customer could indicate that (say) three on-time payment cycles will place them back on a regular credit management cycle.
The specifics of the credit management applied will be specific to the biller's industry (e.g. regulation), network type (e.g. suspension, disconnection) and their experience of the 'effectiveness' of different approaches.
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Stephen Jones is a consultant who has focused specifically on Billing and related processes for over twenty years. Recent work has included integrating a major telco's billing extracts with technical logs from call centres.
I contributed an essay on testing design assumptions in the O'Reilly book 97 Things Every Software Architect Should Know. This book was written in an 'open source' style with more than four dozen authors. The 'source' of the axioms / koans / advice can be reviewed on the project's wiki.
» Note 70: Billing details held against the Account
» Note 69: Account Complexity by Customer Segment