How Do Utility Bill Auditors Help Reduce Business Expenses
The utility bill is something that every household and business has to pay every month. The cost is to cover your electricity, natural gas, and water consumption for the month. In the case of businesses, the bill is even higher.
There’s a way you can reduce the utility bills by doing an audit on your usage. You might not be aware of it, but most businesses end up overpaying for the utilities. An audit looks for such billing errors and explores saving opportunities. This article explains why you should work with utility bill auditors to reduce business expenses.
Why is an Audit Important for Businesses?
Every business uses some form of energy to run the operations. Manufacturing plants utilize a high amount of electricity, while a local restaurant uses a large amount of cooking gas and/or electricity.
As the business grows, so does the energy usage. It gets challenging and overwhelming to keep track of expenses. So you end up relying on the utility invoice bill that you receive from your energy supplier.
But as experienced auditors will claim, over 90% of organizations receive bills with at least one error or overcharge. So you pay an extra amount every month. That’s just the tip of the iceberg. An energy company overcharged one of their consumers 100%-300% within six months, which they later claimed was a computer error. By conducting an audit of your utility bill, you’d be able to locate any billing error and get rid of it at the earliest.
What Does an Audit Process Involve?
Auditors come with specialized skills to go over your utility bills and catch the errors. The main objective is often to ensure that the energy company is billing you correctly. Other than that, there can be other objectives too like:
- Studying and improving the power factor and load factor, both of which can increase the cost
- Identifying the types and costs of energy use
- Finding ways to reduce usage and cost
- Analyzing the bills for data entry errors
While the auditing process varies from company to company, here’s what it looks like in general terms:
Review of Bills and Agreements
When you hire an auditor, he will request all the involvement you’ve received in the past 12-36 months and the agreement and contracts. This will help him understand the billing process and your obligations in working with a particular energy provider. If there are any figures and numbers that raise eyebrows, he will point them out while reviewing the contracts.
Market Analysis for Available Options and Alternatives
The auditor will then look for what other energy companies are charging and what their rates are like. If your existing energy provider is less competitive, then you can wish to make a switch. This would save you money in the long run. Auditor will also look for regulatory requirements and compliance and ensure that you’re fully compliant with them.
Prepare a Report based on audit
It will take 4-6 months to prepare the report based on the audit. The report will list all the discrepancies, errors, and overcharges. By looking at the report, you should be able to know exactly where you’re overspending. It should also contain the measures you can take to reduce the cost and available alternatives.
Implement the Saving Measures
If you agree to the cost-saving measures, the auditor will implement them on your behalf. If you decide to switch the provider, you can do so at your will. It’s worth mentioning here that auditors only get paid when they lower the utility cost or improve it in some other ways. So the audit is free for you. You can request a free audit whenever you feel like you might be overpaying on your utility bills.
Monitor the Future Billings to Ensure Accuracy
Auditors will offer you the option of monitoring your future bills to ensure you’re not overcharged once again. It may happen unknowingly from your energy provider’s side. They will also send you a separate report explaining the cost in simple terms. The bills that energy companies offer contain many jargons that might be hard for you to understand.
There are two types of audits. Those are:
- Monthly Audits
- One-time Utility Bill Audit
Large companies have a team dedicated to reviewing their utility bills. But if you’re a small business, you can opt for a one-time utility bill audit that’s cheaper. By reducing your utility bills, you reduce your business expenditure which directly impacts your bottom line.
Approach your utility bills the same way you approach your taxes. So consider utility bill auditors the equivalent of tax auditors. Unless you possess vast knowledge or experience in utility bills, it’s better to hire experts to review the bills on your behalf.