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ENTERPRISE

Innovation Challenges in the Energy business:
New Business Models

The Energy business requires the close coordination of the suppliers, the customers, and the utilities. Challenges exist due to the high commercial volumes and sub-penny margins made per unit. In addition, contracts are usually based on actual usage but discount are given based on past usage history. If a fixed price is desired for a specific volume, adjustments will either need to be made if the volume is not reached or if exceed, since the actual amount of energy varies by year typically because of conditions that none of these stakeholders have control over. Commission are typically paid monthly based projections but then must be adjusted later based on actuals. In addition to the fluctations in usage, the actual recording of usage can be delayed, reported out of order, reported as a single volume with a period for multiple months, and can even be duplicated in part or whole with a prior reported usage volume. From a revenue recognition stand point, these variation must be maintained for proper financial reporting but for projections these annomolies need to be represented as if they were reported in a timely fashion.

How can the Innovation Pipeline help in the Energy business?

Our application allows the tracking of actuals received date adjustment of the revenue recognition and commission payments and use prorate actuals for the usage periods for projecting future volumes as well as creating revenue schedules need for future revenue recognition in the future.

In addition, contracts can incorporate future projections and opportunities can be generated with the appropriate products, volumes, and margins to allow for review of future business by product delivered (i.e, electric, natural gas, heating oil, ...). These contracts can be variable in price or fixed price or fixed price for one or more periods within the contract. Our application handles margins that require sub-penny calculations against large volumes.

In addition, our application can handle complex payments to external and internal agents and recalculate remaining payments if a new payment plan is put in place.


The Energy business requires the close coordination of the suppliers, the customers, and the utilities. Challenges exist due to the high commercial volumes and sub-penny margins made per unit. In addition, contracts are usually based on actual usage but discount are given based on past usage history. If a fixed price is desired for a specific volume, adjustments will either need to be made if the volume is not reached or if exceed, since the actual amount of energy varies by year typically because of conditions that none of these stakeholders have control over. Commission are typically paid monthly based projections but then must be adjusted later based on actuals. In addition to the fluctations in usage, the actual recording of usage can be delayed, reported out of order, reported as a single volume with a period for multiple months, and can even be duplicated in part or whole with a prior reported usage volume. From a revenue recognition stand point, these variation must be maintained for proper financial reporting but for projections these annomolies need to be represented as if they were reported in a timely fashion.

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