By Liz Baillie, Head of Data Solutions at Utilitywise
IT'S A shocking finding that big businesses could be missing out on millions in cash through incorrect billings on gas, electricity and water – with massive shortfalls passing unnoticed for years.
We know that corporations who deal with large sums of money on a daily basis, and particularly those who are responsible for multiple sites, are most at risk of failing to pick up on inaccurate utility bills due to the hugely complicated process of going over the figures with a fine toothcomb. Energy bills can be notoriously confusing and frequently dense with baffling terminology, therefore making the process for checking for inaccuracies far too lengthy for big businesses to navigate alone, resulting in a black hole in their finances that can easily be avoided.
In our experience of carrying out 100,000 bill checks every year – through both our monthly and retrospective bill validation service – it is a sad fact that we see the majority of businesses being overcharged with potential savings fluctuating wildly from month to month. It is more common to find over-charging errors, than those in favour of the customer.
In fact, we saved a massive £2.6million in incorrect bills for one large client when we started looking over their energy statements from as far back as 2006. A common theme is to see the savings swing dramatically between bills and in this case we witnessed savings go from £54,000 one month to £248,000 the next, which we were then able to claim back for our client.
This example goes to show that the one thing fairly consistent about utility bills is that there will often be errors, but it's very difficult to predict where and when these might occur. It's imperative therefore that action is taken to gain control of energy statements in order to protect businesses' bottom line. Busy corporations may struggle to handle this alone, which is why experts can take the hassle out of this lengthy and complicated process of checking bills with a forensic analysis of individual statements, while also encouraging businesses to become more financially and energy efficient.
Charges built up from multiple elements, like those found in bills for large firms, require time and know-how to be checked thoroughly. This complexity means errors are not always evident just by comparing invoiced rates against the rates in the supplier contract. This level of complexity requires, for example, a professional to check individual components on an invoice, to split the data in order to confirm that the correct charge for each time band has been applied and to check mechanisms have been implemented correctly – not a straightforward process. While a sense check of rates should uncover any obvious errors, it is evident that invoices need a little more.
Added to this complication is the fact businesses are often baffled by the terminology used in utility bills. Our recent research shows that 60% of small businesses were unable to identify that E or A readings mean estimated or actual, whilst a quarter did not understand the term unit rate. One in six of those companies employing up to 249 members of staff also reported that they too don't have the skills they need to make sense of their regular statements.
In our experience, what works on a micro level plays out in a very similar way for larger corporations. Businesses, whatever their size, need help to navigate the energy market and that starts with understanding your statements. The terminology can be confusing, but it's important to get a handle on it because it impacts a business' bottom line. If you don't know that you're paying an estimated bill, for example, you can be in for a nasty surprise.
With more than 24,000 business customers, the team at Utilitywise believes in making the energy sector easier to do business with and it shouldn't be complicated, confusing or opaque. This starts with ensuring corporations have a handle on their utility bills – especially if this could mean restoring millions of pounds worth of cash previously lost in the complex muddle of energy statements.