05.11.2019 | Author: Ilse Melotte

Energy Balance is the driving force behind the energy supplier’s operating model. It is a process, effected by the energy supplier’s management and personnel, designed to provide assurance of the achievement of the objectives in the following categories:

• effectiveness and efficiency of retail business operations
• reliability of the reporting of gross margin
• compliance with energy market applicable laws and regulations

At NrgFin we developed EB Insights^TM, an integrated guidance on risk and performance measurement that supports management by delivering actionable insights.

The objective of the EB Insights^TM methodology is to support the energy supplier in the definition of the following Management’s Assertions, which are claims made by management regarding certain aspects of a business:

 

• Completeness: that all data referring to business events and transactions to which the company was subjected were fully collected;
• Valuation: that all business estimates or incidents are measured at the at the most likely occurrence, amount and/or value;
• Presentation: that all transactions have been classified according the applicable standards and/or regulations;
• Efficiency: that all related processes run in a cost efficient way;
• Accuracy: that all measurements of all business events and transactions were collected and recorded without error.

EB Insights^TM introduces the concepts of:

• Customer Profitability (CP): the difference between actual revenues and costs associated with the customer relationship during a specified period. CP typically measures the past and the short-term future;
• Customer Lifetime value (CLV): a prediction of the net profit attributed to the entire future relationship with a customer. Therefore, CLV looks forward and is useful in shaping managers’ decisions when focusing on economic value creation.