By Richard Tyler
British Gas Business, a small-business gas and electricity supplier, is preparing to let up to 40,000 customers defer paying their bills to help them through the recession.
While the move reflects the growing financial pressure from under which small businesses are operating, it also represents the UK utility's recognition that it cannot simply disconnect customers who have no choice but to pay late.
Kanat Emiroglu, head of British Gas Business' small- and medium-sized enterprise markets, says that he has already seen an increase in the number of previously solid customers trying to delay bill payment.
He indicates, moreover, "We have seen an increase in disconnections, our [customer center] calls are longer, and some of our customers are trying to delay payments. People are suffering, but they are hanging in there."
British Gas Business estimates that as many as 40,000 of its 750,000 small-business customers may need assistance. The company has already agreed to extended payment plans and even entire breaks for several hundred struggling companies.
One such business, Byrnes Fish & Chips of Liverpool, Merseyside, England, owed the utility £9,000 after extending its operational hours without altering its fixed monthly payment.
When British Gas demanded the money back through monthly payments that rose from £800 to £1,800, the owners faced ruin.
Barbara Dickson, who runs the family business with husband David, admits that after some initial resistance, British Gas proved willing to help them pay back what was owed, writing off £2,000 from the bill, reducing the tariff and agreeing to £800 monthly payments.
"They obviously have people who don't want to pay, and it's hard [for the utility's staff] to tell the difference," Dickson explains.
The trick was to get through to the call center's specialized customer service agents: "When I got to speak to Jim Waldren [the agent], I could not have asked for better service," she affirms.
While customers must provide evidence that their businesses remain viable, Emiroglu says that, of the businesses already on extended payment plans, few were concerned about revealing their finances if it meant securing a better deal.
"The more we know about a customer, the more [accurately] we can calculate risk and offer advice," he asserts.
Most businesses agreeing to extended payments also had to commit to become more energy efficient.
"Energy costs will rise a bit in the future ... And energy costs will be volatile in the UK. Some people will take the wrong position," points out Emiroglu.
British Gas not only offered to reduce bills temporarily, but the utility also instructed its debt team staff to provide information to customers about the grants and loans being set up by the government in response to the recession.
Emiroglu acknowledges that the utility is taking a risk by publicly stating its willingness to help businesses pay their bills.
"Our business objective is to say that every bill is an important bill to pay. Try to pay it on time," he reports. "Yes, it's a risk. Everybody could get in the queue. But we don't ignore what is going on in the market, and we want to help.
"We are willing to take a hit ourselves, yet consolidate the information that will help customers through the recession."
* Photo Courtesy of Press Association