Are You Leaving Money on the Table?

Post by Erica Tausch on April 29, 2015

As a result of several years of economic hardship, companies have been forced to rethink how and where to invest like never before. Organizations in the energy trading industry are no exception to this pattern. Many have set their sights on cost (of trading) management in an effort to simultaneously become more efficient and reduce cost. Surprisingly, this cost efficiency may be partially realized in the back office. Now, the question is: Are you leaving money on the table?

During the rapid development of the energy trading industry, technological investments in platforms were driven primarily by decisions based on the front-office. Today however, market participants face a slew of new challenges, including ever-emerging rules and regulations, increasingly complex compliance requirements and an onslaught of new competitors.

In addition to this multitude of obstacles, the growing complexity of structured and tailored products ensures that cost-inefficiency is inherently coupled with higher levels of operational risk. As a result of historically skimping on technological investments as it pertains to back-office solutions and processes, many energy trading companies find these complex trades can only be properly accounted for with a miniature army of settlement analysts, while others fail to properly account for them altogether.

Inaccuracies and error-prone manual settlement processes cost money that an energy trading or supply company can’t afford to lose. In the present energy trading environment, the key to successfully managing complex, non-standard trading products and counterparty agreements lies in a strategically implemented settlement system. Such a system provides:

  • The straight-through-processing of meter data
  • Billing determinants management
  • Settlement
  • The automation of accounting entries

With a flexible, hierarchical book structure, tailored and structured deals can be easily modeled and a robust, formula-based architecture allows users to both provision complex billing rules and easily maintain them. Developed from the back office forward, this enhanced back-office functionality and transparency will deliver both a better data structure and processing capabilities, equipping your organization with the tools it needs to comply with lofty reporting requirements.

Lastly, a standalone settlement solution is ideal for energy companies not currently ready or equipped for the wholesale replacement of their current, complex ETRM system or for those who prefer approaching this large change with a phased approach. Ultimately, both the flexibility and advanced technology of a tactical settlement system offers faster time-to-value, less vendor reliance and most importantly, a lower total-cost-of-ownership over time.

With cost management front and center, forward-thinking energy companies are ensuring they achieve maximum productivity and sustain operational performance by re-evaluating their complex operations and underlying processes. There’s no better way to do this than by leveraging a modern, malleable settlement system in order to efficiently and effectively automate and manage complex contract billing and settlements.

Consequently, organizations are able to minimize settlement disputes, improve financial accuracy down to the cent and reduce back-office cost—actions that all result in better operational margins. So, are you leaving money on the table in your back-office process?


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Pioneer Solutions is a global provider of next generation CTRM, ETRM, environmental management and financial and regulatory compliance solutions. Offering the latest in business processing capabilities with a modern data structure, Pioneer’s products offer the user a configurable environment that allows for customizable templates for STP workflow and user-defined custom formula entry. Serving some of the largest utilities and energy companies across the globe, Pioneer’s flexible solutions are designed for rapid deployment and easily adapt to clients’ unique business processes, model complex trading scenarios and automate business processes. 


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