Report reveals billions lost by utilities through revenue leakage

Utilities are failing to collect 4.68% of the revenue they’re owed, creating a £3.3bn finance black hole, according to data consultancy, Sagacity Solutions.

In its report, The missing billions: the impact of revenue leakage on UK business, Sagacity found:

• 76% of utilities are aware revenue leakage is a major problem, but don’t know how to prevent it – with 82% likening revenue leakage to "death by a thousand cuts";

• almost three quarters said revenue leakage will lead to people losing their jobs, with 70% saying revenue leakage is hampering growth and profitability; and

• 78% said poor quality data is a major source of revenue leakage, with 84% saying a lack of quality data prevents them from collecting earned income.

According to Sagacity, half of the revenue leaked can be attributed to avoidable issues, such as poor reconciliation, lack of oversight, governance and controls, human error, and inaccurate data. Major causes of revenue leakage are incorrect billing and giving discounts erroneously.

Sagacity suggested the first step to resolution is to pinpoint the processes that cause leakage the most often and to ensure data is being captured correctly, then regularly cleansed and updated.