The capability gap between debt collection and disconnection

There comes a point in utility debt recovery where the conversation changes.

At the start, it is usually about arrears, contact attempts, payment reminders and customer engagement. Those are familiar areas for any credit or collections team. But when an unpaid commercial utility account reaches the stage where temporary disconnection may be considered, the process moves into very different territory.

At that point, it is no longer only a collections matter. It becomes a legal, operational and capability issue as well.

That is the capability gap between debt collection and disconnection: the space between identifying that a customer has not paid and being able to take further action in a way that is lawful, proportionate, properly evidenced and operationally safe.

In my role across Occutrace and Osprey Resolve, I see this gap regularly. Credit teams are under pressure to reduce aged debt, recover cash and keep accounts moving. That pressure is understandable. No business can allow commercial debt to sit unresolved indefinitely. But in the utilities sector, especially within the non-household water market, recovering debt is rarely as simple as moving an account from one escalation stage to the next.

Before physical field action can take place, providers need confidence in the facts. Is the correct customer being pursued? Is the premises occupied? Has the occupier changed? Is the site eligible for temporary disconnection? Has the correct notice and process been followed? Is the meter accessible? Are there any safety concerns? Is the team attending site properly trained and accredited? If payment is made or the account is resolved, can reconnection happen quickly and safely?

These questions matter because disconnection is not just a firmer form of debt collection. It is a regulated intervention, and it carries a different level of responsibility.

One of the biggest challenges is that the journey from arrears to resolution is often fragmented. An account may start with internal credit control, move to an external collections provider, require tracing, then legal review, then field investigation, then coordination with another party for disconnection or reconnection. Every handoff creates the potential for delay, duplicated work or missing evidence.

That delay has a cost. Older debt is harder to recover. Customers become more difficult to engage. Records become less reliable. Sites change hands. What began as a straightforward unpaid account can become a long-running operational issue with no single owner and no complete view of the facts.

This is where capability risk starts to build. If the evidence is incomplete, the legal pathway becomes weaker. If site information is wrong, the field visit may fail or, worse, action may be considered against the wrong party. If the process is not clear, a provider may struggle to show why a particular decision was made.

For me, this is one of the most important points in modern utility collections: evidence is not administration. Evidence is protection.

It protects the provider, the customer, the field team and the integrity of the recovery process. A strong evidence trail should show what contact was attempted, what was found on site, who was occupying the premises, whether the meter was accessible, what photographs or notes were gathered, whether the site was suitable for disconnection and what outcome followed.

That evidence can support escalation, but it can also prevent the wrong escalation. A field visit may show that the billed customer is no longer trading at the premises. It may identify that a vacant property is actually occupied. It may reveal a billing issue, a meter access problem, poor customer data or a wider site issue that would never have been picked up through desk-based collections alone.

That is why early arrears management needs to be more than a chase process. It should be an investigation process too.

The earlier a provider understands the reason behind non-payment, the better the outcome is likely to be. If the issue is poor data, it can be corrected. If the occupier has changed, that can be verified. If the customer is avoiding engagement, that can be evidenced. If the account is suitable for further action, the legal and operational pathway can be prepared properly.

This is where a one-stop-shop approach can make a real difference.

Temporary disconnection must always be handled carefully. It should never be treated as a blunt instrument or as a standard extension of debt collection. To carry out this work properly, providers need the right approvals, controls and technical capability in place.

This is why WIRS and WIRSAE accreditation matter. These accreditations are not box-ticking exercises. They show that an organisation has met the required standards to carry out specialist water industry work, including temporary disconnections and reconnections where appropriate. For Occutrace, achieving the necessary accreditation has taken time, focus and investment, because the responsibility attached to this work is significant.

At Occutrace and Osprey Resolve, our Collect & Disconnect model is built around that responsibility. The aim is not simply to support temporary disconnection as an end action. It is to provide a controlled pathway from arrears through to resolution, bringing together debt support, customer and occupier checks, field investigation, legal readiness, WIRS and WIRSAE-accredited temporary disconnection, reconnection and reporting.

That joined-up approach matters because it reduces the number of handoffs. It gives clients a clearer view of what has happened and what needs to happen next. It also helps create a stronger audit trail, which is essential when dealing with any form of regulated field action.

Occutrace has helped recover millions for water retailers, but the value of the service is not only measured in cash recovered. In many cases, the wider value comes from what is uncovered along the way: incorrect occupier records, vacant sites that are trading, meter access issues, billing inaccuracies or poor account data that may have allowed the debt to build in the first place.

This is where debt recovery and revenue assurance begin to overlap.

A visit linked to unpaid debt can also protect future revenue by improving the accuracy of the customer record. It can help prevent the same issue from recurring. It can provide evidence for legal escalation where appropriate, or show that another route is needed. For utility providers, that insight is extremely valuable.

Of course, disconnection must always be handled carefully. It should never be treated as a blunt instrument. It should be used only where appropriate, with the right checks, the right evidence and the right controls in place.

But fair treatment does not mean avoiding difficult action. It means making sure that action is necessary, proportionate and properly targeted. A firm recovery strategy can still be a fair one if it is based on accurate data, clear communication, proper process and a defensible audit trail.

The question for credit and collections teams is not simply whether an unpaid account should be escalated. The better question is whether the organisation has the right process in place to escalate it safely.

Who owns the evidence? Who verifies the site? Who checks eligibility? Who prepares the legal pathway? Who carries out the field activity? Who manages reconnection? Who reports the outcome?

If those responsibilities sit in different places with limited coordination, the risk of delay and error increases. If they are brought together through a specialist, integrated model, the process becomes clearer, faster and more accountable.

The capability gap between debt collection and disconnection is not a small technical issue. It is the difference between action and defensible action.

As pressure on commercial recovery continues, utility providers will need more than standard collections routes. They will need processes that connect credit control, legal readiness, field intelligence, capability and operational delivery.

That is where I believe the future of utility debt recovery is heading. Not towards heavier-handed enforcement, but towards better-controlled, better-evidenced and more joined-up recovery.

Because when the action becomes more serious, the process behind it has to be stronger too.

David McKenzie is Managing Director, Occutrace and Osprey Resolve