CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter introduces the fundamentals of a financial information system for gas company. It presents the theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

1.1 Theoretical Background

Effective billing and collection systems are a critical component for ensuring the viability of a service provider. Improving billing and collection activities has an immediate impact on the revenue streams of a service provider that can, in turn, help the service provider in improving services. However, while effective billing and collection practices depend on many internal factors(including customer databases, the extent of metered and unmetered service provision, tariff and billing structures, delivery of bills, and facilities for customer payments), the institutional arrangements under which service providers operate and provide services determine whether such practices will remain sustainable in the long term. Efficient billing and collection practices can set incentives for the provider to effectively charge and collect gas bills while also fulfilling a commercial orientation to services (Agrawal, 2008).

The introduction of smart metering is one of the core elements in recent European policies targeting the environmental sustainability and the competitiveness of gas and electricity markets. Many utilities today are evaluating the potential benefits of Smart Metering for all utility stakeholders. Smart Metering gives customers real-time consumption information via display device that translate the meter reading into a form the customer can easily understand. These devices help customers change their consumption, should they wish to do so, without having to wait for the end of the month or the end of the quarter to view the results from conservation initiatives. Displays tailored to the specific needs of the user, such as those comparing current use with neighborhood averages or with consumption in previous months, may help consumers further focus on conservation. Utilities can use time-of-use or interval data to better analyze and manage supply portfolios and the scheduling of generation or supply withdrawal from storage fields or reservoirs. Interval data matched to customer type and location is particularly helpful in identifying needs for network or pipeline repairs or changes. It can also point to the location and size of leaks or theft. Some Smart Metering systems permit meters to send “last gasp” messages when they are going out of service. These help utilities identify the location and extent of an electrical outage or a break in a gas main (Oracle Utilities, 2011).

Utilities frequently use a Smart Metering communications network to obtain an off-cycle, “final” meter read for customers moving or leaving the area. It is common to couple these real-time final meter reads with web sites for on-line bill payment or with call centers that accept payment over the phone. Utilities frequently find it is easier and less costly to obtain rapid final payments from customers before they leave the area. Remote meter disconnects are another cost-saving feature of many Smart Metering systems. These reduce the costs to send field crews to the premises of customers who have either requested a disconnect or who are being disconnected (or ratcheted back) for bill nonpayment. Smart Metering applications often permit utilities to check meter status (“ping the meter”) prior to sending a repair crew in response to a customer call. These checks prevent needless field crew dispatch to customer sites where problems are not the utility’s responsibility. Most Smart Metering applications permit remote theft-detection tests geared to the type of meter and the type of utility service. They can ensure that almost all bills are based on actual meter reads rather than on estimates; this reduces calls to the contact center and improves customer satisfaction (Oracle Utilities, 2011).

However, at the basic level most Gas companies that cannot utilize smart metering make use of database applications to track customer billing records and also update it quickly. It is in view of the numerous applications of computer in gas utility management that necessitated this study. The computer system is a very important and powerful tool and organizations that have realized its benefits are taking full advantage of it to get better operations and accurate outputs. One of the major applications of computers is in billing. This is so because the computer system is fast and accurate in the carrying out of computations. A computerized gas billing system for is an application that will enable the gas company to carry out their billings accurately. The overall objective of gas companies is to provide quality gas service to consumers at reasonable charges. The present billing system has been in place from inception and it is manually obtained. The profit or loss made by an organization is dependent on the nature of its billing system. This therefore necessitates the use of more reliable, accurate and efficient equipment such as the computer system for the processing of the bill of customers. This shift from manual to digital will bring about positive growth in the operations of the company.

1.2 Statement of the Problem

The following problems were identified:

• Poor billing and collection practices primarily emanate from the lack of willingness of the service provider to accurately charge for services being delivered and the lack of a political will to set tariffs that would allow for recovering the costs incurred in supplying the service.
• Most service providers do not have well-defined and proper computerized or automated systems to maintain financial records for gas billing.
• The manual process of billing bring about arguments between customers and service providers, there is no adequate record management system to aid in the accurate computation and updating of gas bill records.
• Absence of financial information system to manage gas bill records.

This situation therefore warrants the development of a financial billing information system for gas company

1.3 Aim and Objectives of the Study

The aim of the study is to develop a financial information  system for gas company. The following are the specific objectives of the study:

1. To design a database system that will help maintain record of customers’ gas bill
2. To implement a system that will accurately compute the gas bill of customers.
3. To design a system that will out-perform the manual way of recording and computing the gas bill of customers
4. To design a system to facilitate easy updating of gas bill records and presentation of gas bill reports.

1.4 Scope of the study

This study covers financial information system  for gas company using God is good gas company in Ikot Ekpene as a case study. It is limited to a database system to compute and save the gas bill record of customers for future retrieval and not automatically metering the gas used.

1.5 Significance of the Study

The significance of the study is that it will facilitate accurate computation of gas bills and also aid the easy management of customers’ gas bill records of God is Good gas company, it will aid in eliminating errors associated with the computation of gas bill and provide an instant means of updating gas billing records. The study will also serve as a useful reference material to other researchers seeking for information relating to the subject.

1.6 Organization of the Research

This research work is organized into five chapters. Chapter one is concerned with the introduction of the research study and it presents the preliminaries, theoretical background, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

Chapter two focuses on the literature review, the contributions of other scholars on the subject matter is discussed.

Chapter three is concerned with the system analysis and design. It presents the research methodology used in the development of the system, it analyzes the present system to identify the problems and provides information on the advantages and disadvantages of the proposed system. The system design is also presented in this chapter.

Chapter four presents the system implementation and documentation, the choice of programming language, analysis of modules, choice of programming language and system requirements for implementation.

Chapter five focuses on the summary, constraints of the study, conclusion and recommendations are provided in this chapter based on the study carried out.

1.7 Definition of Terms

Bill  A written statement of how much money is owed for items purchased or services provided.

Gas  A substance that is neither a solid nor a liquid at ordinary temperatures and has the ability to expand infinitely

 

Database  A systematically arranged collection of computer data, structured so that it can be automatically retrieved or manipulated.

 

SMART  Self Monitoring Analysis and Reporting Technology

System  A collection of related parts working together to achieve a particular goal.

Revenue  Money that comes into business from the sales of goods or services

Tariff  A list of fees, fares or other prices charged by a business