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Westar Energy-The Revenue Cycle
Transcript of Westar Energy-The Revenue Cycle
and Reporting System Kansas
Commission orders payments Inquiries Responses to Inquiries Regulations General
ledger Deposits Statements 3.0 Cash
Collections The KCC has Billing Standards for Utilities (Electric, Gas, & Water).
Westar has different tariffs for customer types (residential, large commercial/industrial, small commercial/industrial etc). Each of these tariffs has to be approved by the KCC.
The KCC also regulates Westar's collection practices, such as deposit requirements, shut-off notification etc. Customer service requests inquiries responses
to inquiries Receipts payments Customer General Ledger
System Deposits Statements Bank In the Revenue Cycle, the primary external exchange of information is with Customers. The internal audit department, who reports to the audit committee looks at the billing and collection processes about every 3 years. Dealing with Customer Accounts
• Deposits are required for most of the customers that Westar has, and the terms are regulated by the Kansas Corporation Commission (KCC).
• Westar is required to give the customer an opportunity for a pay agreement.
• After disconnection, the outstanding balance is sent to a collection agency to collect payment. Customer Bills?
•Everyone has the ability to see customers bills in Westar’s CSS system.It is setup this way so that any employee can see the bills so that they can assist customers.
•However, only the billing department as well as the credit and customer relations personnel can actually make changes to customer bills.
•Reports are even issued that show when significant changes have been made to billing
•Reports are even issued that show when significant changes have been made to billing adjustments. Feedback How? Order is completed by field employee unless the service address is served by AMI(Digital Meter) Obtaining the meter read as the start of service Phone Checks Credit Cards Send out Disconnect Notices
Provide a courtesy call two days prior to scheduled shut-off for non pay
Order sent for shut-off if payment or payment arrangements have not been made Monthly statements Receipts Where else does Information about revenue cycle flow to ? Any special entities? : Besides KCC, Westar's Audit Committee oversees the revenue cycle. Westar's
Audit Committee Reports Feedback Inside the Revenue Cycle, Westar has its Internal aduit group, which gives reports to Westar's Audit Committee. Big Picture: Information about revenue cycle activities flows to other accounting cylces as well as external entitites. : How is the revenue cycle linked to other subsystems in Westar's information system? : What does the inside of Westar's revenue cycle look like? 3 basic daily business activities+1 basic monthly business activity Production Cycle service orders 1.0 Issue Order for Turn On 1.2 Check credit 1.1 Receive service
requests 1.3 Complete Order Through phone conversations with customer service reps or web. customer set-up data structure of the customer database 2.0 Billing 2.2 Bill the account 2.1 Verify meter read completed service orders At the same time, the compeleted service orders are sent to Billing department. Meter Reader obtains monthly read.
Westar runs system verification to ensure the read seems normal for that service address. If not... Then Westar may need to issue reread Bill the account based on the tariffs approved by the KCC and applicable to customers. 2.3 Maintain A/R At Westar, the open-invoice method is used. Monthly statments A/R Special at Westar: Inside the Revenue Cycle, Westar has its own accountants who are responsible for handling the A/R entries as well as serving customers with complex service needs 3.2 Deal with non
payments 3.1 Process payments through remittance processing Production Cycle service orders Other facts related to Westar Energy: Customer payments are required to be paid in prior to services.
Larger use customers (commercial and industrial) have to sign contracts if Westar is adding infrastructure to provide the electric service.
Revenue Cycle closes every month, just like Accounts Payable, General Ledger, and Inventory Cycles do.
There are 21 billing cycles for the retail customers
The collection process follows in the same manner as the billing cycle. 4.0 Month End Closing 4.2 Estimate unbilled
revenue 4.1 Reports to General
Ledger Record revenue billed and associated sales tax etc electricity delivered after meter read of each customer through the end of the current period Tax table service oreders Westar's Internal Controls: Avoiding theft
•The same person cannot bill the customers and accept payments (segregation of duties)
•The CSS system also verifies deposits to changes in customer balances every day.
Risk of shortfalls
•To reduce the risk of shortfalls, Westar has short term credit facilities that are available to them. Sample Documents at Westar Westar was started as Kansas Power and Light Corporation (KPL) in 1924 in Tecumseh, Kansas. It began putting transmission lines that ran to Topeka and Atchison. The company then immediately began acquiring customers and assets of other area electric and natural gas utilities. In 1983, KPL acquired The Gas Service Company and rights to serve its one million natural gas customers in Kansas, Missouri, and Nebraska. Then in 1992 KPL merged with KG&E to become Western Resources. Most recently the Western Resources shareholders approved the changing of the company’s name to Westar Energy.
Today, Westar employs about 2400 people and serves about 700,000 customers in much of east and east-central Kansas. It’s energy centers generate more than 7,000 megawatts of electricity, and operates and coordinates 35,000 miles of transmission and distribution lines. Job Positions:
Meter reader-verify meter reading
Service man- initial turn-ons or turn-offs
Customer service rep-receive customer inquiries, take service orders
Accountant-handle both the A/R entry and complex customer orders
Remittance processing opearator-treasure function