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Settlements management

The value of established settlements management processes and the risks of not.

For an energy supplier, one of the biggest challenges to realising forecasted contract values is managing the many millions of data items which pass through the business to ensure it is accurate and extracting the required information. In an environment where the energy position for a single point in time is fluid for many months or years, it can appear to be an almost impossible task to control and access your active data.

The benefits in investing in a data management process is the ability to view, query and optimise the use of the data flows available. Neglect it and the supplier runs a high risk of the portfolio becoming heavily loss making; perhaps without even knowing about it, let alone having the tools and capabilities to rescue the situation.

Phidex Consulting took on an engagement with a particular client whose primary operations were overseas, based in its parent headquarters. Although the mandatory files were processed and a best view at the time of what energy had been used was charged to their I&C customers, soon the finance books started to show worrying gaps between energy quantities purchased against those sold. Significant losses started to appear without understanding or having a plan of how to stop the rot. Ultimately decisions needed to be made about this organisation continuing in the UK Market.

Phidex’s involvement came following a move to bring operations to the UK and to seek expert help. Without a system or dedicated team in place, it was a ‘start from scratch’ approach for Phidex.

Within the first year, a Phidex led team was established and work started on a central data warehouse to process all energy charges, achieve an accurate view of the real settlements gap and develop a plan on how their imbalance was to be reconciled.

Using our experience and good relationships within the industry, quick wins were achieved and significant returns were promptly reported. This positive work continued from top to bottom and before long the Head of Finance was overjoyed to see the position move into the black; a shift of tens of millions of pounds.

With vastly improved flow management capabilities, the Sales team worked in (almost) harmony with Risk, as pass-through products being developed could be built upon the surety of accurate and cleansed data. Billing performance increased as did the customer experience; in turn the client’s market share grew in their sector in line with their reputation for quality.

Phidex stayed with their client on this journey for a number of years; the success story became a blueprint for future client projects.


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