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PROPOSED BILLING AND

MONITORING SYSTEM FOR
MEPCO AND ITS FINANCIAL
EVALUATION.


Presented By :
Syed Hasan Bilal Gilani.

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Presentation Outline :
 Introduction
 Statement Of Problem.
 Overall Objectives.
 Specific Objective.
 Scope And Limitation.

 Literature Review.
 Information
 Summary

 Methodology
 Analysis of Prevalent And Proposed System
 Drawbacks Of Prevalent system
 Method Of Financial evaluation
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Presentation Outline :
 Results And Discussion.
 Benefits.
 Financial evaluation.
 Simple Payback Period.
 Discounted Pay Back Period.
 Net Present Value.

 Conclusion And Recommendations.
 Conclusion.
 Recommendations.

 References.








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Introduction:

 Technology has merged itself with the daily life of humans.

 Almost all the field of life are getting full advantage of computer
and its related technologies which results
1. Reduce Cost
2. Effective Control.

 Area that required improvement , is in the Mepco billing system.

 Our existing electricity billing system in all Discos
1. obsolete ,
2. time consuming,
3. prone to errors and
4. can easily be manipulated.

It also requires a lot of officials to complete the job.

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Statement Of problem:
 Companies are focusing too much efforts in decreasing the line
losses and increase %age Recovery.

 In every meeting it is also a prime agenda.

 But no adherence is being given toward
1. the effective , cost reduction,
2. time saving and
3. targeted utilization of workforce.

 This project report results an approach
1. to a sophisticated ,
2. Effortless,
3. Error less and
4. Effective recovery monitoring system to the company.

 This would be the proposed automated electricity billing system.

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Overall Objectives:

To develop new system which makes the monitoring system
more easy and convenient.


To develop the new system which reduces billing and
payments posting cycle.


To develop the new system which is financially viable and
reduces the company cost.

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Specific Objectives:


 Financially viable system which reduces the company cost.

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Scope And Limitation:
 focusing on developing a mechanism for MEPCO billing
system by which the monitoring system is convenient and
viable than the prevailing system which is not precise and
has too much flaws.


Limitations:
1. financial crises of the MEPCO.
2. Lack Of Funds.
3. Lack Of Top Management Commitment


 The company may get funds from the donor agencies like
USAID or World Bank or from the commercial banks.


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Literature Review:



 Prepaid billing In Uganda.

 The authors have elaborated the development of computerized
billing for those

 who pay for power are exorbitantly charged to cover the costs of
energy lost .

 Help in improving the recovery of bills.


 Help reducing the work load on employees.


 Provide billing according to accurate billing.
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Literature Review:
 EPBS is an information technology-based innovation that
mostly utilizes a “smart card”.

 It requires the customer to
 make advance payment before electricity can be used.
 Incase credit is exhausted then the supply is cut off by a relay
system.


 Customer can recharge by vending the token.


 Amount will be credited with the value of the electricity
purchased.


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Literature Review:
 Inter Net Billing in UK.

 This research investigates the new technologies that are
making Internet billing more feasible,

 Model is Focusing on

 Reducing Cost.

 Organizational structure

 customer relationships.


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Literature Review:

The process is complex as it involves

Electronic delivery,
Bill presentment,
Auditing and record keeping,
Payment options and the payment process.


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Literature Review:
 It has five major steps.
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Literature Review:
Paper Less Billing In Pessynlvania.

 Once customer enrolled, he will receive a confirmation email .


 When his bill statement is ready, company will post it online and
send customer an email.


 Enrollment is easy. Get started by signing into customer online
account.


 Customer can switch back to receiving a paper bill at any time.
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Paperless Billing In Pennsylvania:

 Help the environment by reducing paper waste.

 Receive an email notification linking you to your new bill
statement.

 Customer will have access to it immediately rather than having
to wait for it in the mail.

 View customer last six months of bill statements online

 Download customer bill statements for record keeping.

 Enjoy the convenience.
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Literature Review:
 Online Billing In India:

 The Orissa government has introduced online payment
system for the payment of electricity bills from 1st January
2010.


 Other States like Andhra Pradesh and Karnataka have
introduced such a system for electricity consumers in the
urban areas.



 West Bengal has introduced this system for the rural
consumers in a restricted way.


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Literature Review:
 Previously it was difficult for the power distribution companies to
collect electricity bills from every nook and corner of the state.


 Now this system will facilitate payment of electricity bill.


 This system provide two main benefits.

 Facilitate online payment of electricity bills.
 Having far reaching impact on the total energy
management.


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Summary:
 The above research indicates that utilities are using modern
and advanced means of billing and payment system to
reduce their cost, improve efficiency and improves customer
relationships.


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Methodology:
Analysis Of Prevalent And Proposed System :
 Prevalent system is a completely manual reading and
billing system.


 Prone to be manipulation and bogus entries.


 Started with the issuance of billing programme by the
Manager commercial of the company.


 Whole area is divided into 23 batches .

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Methodology:
Analysis Of Prevalent And Proposed System :
 Each batch is divided into sub batches.


 Reading is being done through meter readers.


 There are one MIS head quarter and four sub branches which
deals with the billing of 2 circles each.


 Every batch has a scheduled date for completion of reading
according to billing schedule but it is never be implemented.



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Methodology:
Analysis Of Prevalent And Proposed System :
 Billing delayed due to manual reading as well as delayed
printing of meter reading list.


 Bills when delivered is then paid in banks , Post offices and
Nadra franchise shops .

 After payment Banks, Post offices send the scroll to
Revenue office .

 Revenue office then checked the payment from stubs and
scroll and then send to computer center for posting.

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Methodology:
Analysis Of Prevalent And Proposed System :

Sumission of
Reading List To
computer center 2
days
Printing of Bills In
Computer center 7
days.
Collection of
Bill from
computer
center 1 day
Dispatching of
Bills to
Assistant
manager
Operation Office
1 day
Submission of
Reading List to
Revenue office 2
days.
Reading To Billing Cycle In Prevalent System.
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Methodology:
Analysis Of Prevalent And Proposed System :
Sending of scrolls
And Stubs From
Banks/post offices
To Revenue offices:
4 days.
Checking Of scrolls
with stubs and
sending to computer
centers: 4 days.
Punching Of Scroll
and stubs In
Consumers
account:4 days.
Billing To Payment Posting Cycle In Prevalent System.
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Methodology:
Analysis Of Prevalent And Proposed System :
Drawbacks:

 Billing delayed .

 Resultantly late delivery of bills.

 Late submission of bills to consumer. Some time one or two days before
due date and some after due date.

 Most of the consumer unable to pay the bills due to late delivery of bills.

 Poor Recovery %age.

 Unable to provide clear 10 days to consumers for payment.

 Monitoring of recovery can not be possible.

 Old system that can not be updated according to the current needs.

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Methodology:
Analysis Of Prevalent And Proposed System :

Proposed System:
 Billing Procedure
 Hiring Of renowned national or international Software company for

 That caters our today’s requirement of billing and monitoring system
 Through bidding system or whatever the requirement under government rules.


 The selected company will be responsible for

 Maintenance
 And updating the system for the period of ten to fifteen years.

 Reading will be done by hand held devices


 Then this system is provided to

 All Revenue office,
 SDO office for monitoring and feeding of basic data and printing of bills.



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Methodology:
Analysis Of Prevalent And Proposed System :

 In New system the field office is being provided the facility of
new billing system.


 There will be one server which will be located in the MIS
center in the head office .

 All the field formations must be given access to this system
for better monitoring purpose.

 Every officer/ official is provided unique identification code.




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Methodology:
Analysis Of Prevalent And Proposed System :

 The duty can be performed on computer software and send
directly to next higher authority for approval.


 No need of separate computer center and in this way we can
save significant amount every month in shape of.
 Salary.
 TADA.

Payment Posting Procedure:

 We may offer our own franchise and give its franchise rights to
private people as well as banks and post offices.



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Methodology:
Analysis Of Prevalent And Proposed System :


 The franchiser may get the franchise after paying security
amount.

 Security amount will be from Rs:0.1million to Rs:10 million.

 Franchisers can receive payments of the bills equal to the
security amount on each day.

 Nadra, is doing the same practice.


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Methodology:
Analysis Of Prevalent And Proposed System :


 Our company is giving Rs:8 per bill for collection charges .

 NADRA offered many franchises in the distribution company area.


 Nadra is offering Rs:6 per bill as a collection charges of the bills
and remaining Rs:2 per bill is going to Nadra every month.


 By opening franchise , Mepco can also offer Rs:6 for collection
charges and can save Rs:2 per bill every month .

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Methodology:
Analysis Of Prevalent And Proposed System :

 By doing so Mepco not only can save
 Huge amount of money every month
 Able to get the recovery position of the particular batch immediately
after the due date ends.

 The proposed system will not only remove all these problem
but also bring
 Ease and convenience
 Reduce unnecessary workload from employees.

 It will also provide
 Better customer friendly image in the eyes of valued customers
 Reducing unnecessary complaints.

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Methods Of Financial Evaluation:
Financial evaluation will be done on the basis of

 Simple pay back period

 Discounted pay back period.

 Net Present Value.


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Results And Discussions:

 Reducing reading to billing time from 12 to 3 days.

Submission of
Reading
Through hand
held devices 1
day.
Printing of Bills In
Revenue Office
center 1 day.
Collection of Bill
and dispatch to
Customers 1
day
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Reading to Billing Cycle In Proposed System
Results And Discussions:

 Collection of bills and payment on the same day. Reducing the
bill collection to payment posting cycle from 12 days to 1 day.

Collection Of
Bills same day
Posting Of
payment
through
Franchised
shops in same
day.
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Billing to Cash Posting Cycle In Proposed System
Results And Discussions:

 In this system there will be facility of feeding the daily payment of
bills which will be done by opening of franchise shops .

 Reading will be done through Hand held devices. Previously it
will be done through the meter readers manually. This will
provide the following benefits.

 Reduce labor cost.

 No manipulation.

 Quick updation.


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Results And Discussions:

 Effective monitoring system.

 Improving recovery due to correct , timely delivery of bills
and effective monitoring system

 Elimination of bogus information regarding recovery.

 Eradication of bogus billing and reducing public
complaints .

 Improving company image in the eyes of public.

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Financial Evaluation:


Cost Total No Total cost Cost Total No Total cost Cost Total No Total cost
1 2 3 4 5=3+4 6 7 8=6+7 9 10 11=9+10 12=5+8+11 13 14=12+13
Prevalent
System 0 0 0 0 0 0 0 0 0 0 0 0 0
New
System
80 0.12 200 24 0.4 60 24 0.02 1400 28 156 28.54 184.54
Total Cost Involved In the New Computerized Billing System
Cost Of
Intrest rate
15% for
one Year
No Of hand held units
Total
Investment
cost
Amount In Million Rupees.
No PC required No Of Printers Required
Total System
Cost
Cost Of
New Software And
Its maintenance
Category
of
System
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Financial Evaluation:

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No Of
employees
required In The
System
Average
salary
Per Person
Total
Salary
Per
Month
Total
salary
for 5
years
Monhtly
TA
& DA
Amount
No Of
Offices

Monthly
TA&DA
expense
Per
Month
Total
TA& DA
cost for 5
years
Amount
Per Bill
No Of Bills
Paid
each
Month in
mill
Monthly Bill
Collection
Charges in
million
Bill
Collection
Charges For
5 Years in
million
1 2 3 4=2*3 5=4*60 6 7 8=6*7 9=8*60 10 11 12=10*11 13=12*60\ 14=5+9+13
Prevalent
System 100 0.03 3 180 0.07 30 2.1 126 8 3 24 1440 1746
New
System
70 0.03 2.1 126 0 0 0 0 6 3 18 1080 1206
Total
Saving
-30 0 -0.9 -54 -0.07 -30 -2.1 -126 -2 0 -6 -360 -540
Total
Operation
Cost in
millions
Amount In Million Rupees.
Category
of
System
Saving In TA & DA Cost
Total Savings Involved In the New Computerized Billing System
Saving In Salary
Saving In Bill Collection
Charges
Simple Payback Period:

184.54 (Outflow)



(Inflows) 115.2 115.2 115.2 115.2 115.2

Simple Payback period= 184.54/115.2= one year and six
months

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Discounted Payback Period.
184.54 (Outflow)




(Inflows) 115.2 115.2 115.2 115.2 115.2

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Year Income Investement
Intrest
15%
Total
1 2 3 4 5=2-3-4
0 184.54 0 184.54
1 115.2 184.54 27.681 97.021
2 115.2 97.021 14.55 -3.626
3 115.2
4 115.2
5 115.2
Hence discouted Payback
period is less than 2 years
Calculation For determining Discounted Pay Back Period

Net Present Value.
184.52 (Outflow)



(Inflow)
115.2 115.2 115.2 115.2 115.2
NPV= -184.52+ A( P/A,I,N=5) Annuity=115.2 I=15%
NPV= -184.52+ 115.2 (2.991)
NPV= -184.52+ 343.965
NPV= 159.46
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Analysis:
 From the figures in the above table, it indicates that simple
payback period and discounted payback period is less than 2
years. Its Net present value is also positive.


 Any payback period less than 5 years is considered to be good for
business purpose.



 This payback period of only less than 2 years and net present
value is also positive. It makes this project very lucrative and
MEPCO can easily adopt this system without any hesitation.

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Conclusion And Recommendation:
Conclusion:
After implementing this model it would be expected to get
following benefits

 Financially viable.

 Reduces cost.

 Improves Recovery position.

 Provide effective monitoring.

 Reduces extra labor and saving a huge amount of money
every month.

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Recommendations:
 Due to facing financial problem so it is decided in the first stage to
use hand held devices which is low in cost.

 But it is highly recommended to use AMR meters in the high tariff
consumers when the company financial health will be improved ,
and priority must be given which is as under.

 Industrial consumers.


 Tube wells consumers.


 Commercial consumers above 5 kW.

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References:
 Awoleye Michael. Evaluation and Program Planning, Volume 3, Issue
3, 1980, Evaluating the impact of utility company billing plans on residential
energy consumption .

 Francis M. Mwaura 2012. Adopting electricity prepayment billing system to reduce
non-technical energy losses in Uganda: Lesson from Rwanda .

 Kenneth Train, Patrice Ignelzi, Robert Engle, Clive Granger, Ramu
Ramanathan. Energy, Volume 9, Issues 11–12, November–December
1984, The billing cycle and weather variables in models of electricity sales.

 Marilyn Chikaodili Amobi. Socio-Economic Planning Sciences, Volume 41,
Issue 4, December 2007, Deregulating the electricity industry in Nigeria: Lessons
from the British reform .

 Maureen Milroy, Feng Li. Research ArticleInternational J ournal of
Information Management, Volume 21, Issue 2, April 2001,Internet billing: the
experience from four UK utility companies .


 , Yu-Yi Chen, Jinn-Ke Jan, Chin-Ling Chen. Computer Networks, Volume 48,
Issue 4, 15 J uly 2005.A fair and secure mobile billing system .


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THANK YOU.
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