Simply put, a utility audit is a detailed, thorough analysis of all your utility bills, including electric, water, sewer, and gas. Executing a comprehensive utility audit finds billing inconsistencies and errors and examines your business’s rate plan for effectiveness. A utility auditor will evaluate your rate plans and suggest cost effective changes.
Utility providers do not go out of their way to make it easy for you to understand their billing system. Bills, codes, industry tariffs, and even utility terminology can be confusing and impossible for the layman to understand. Calculating what you should be paying is not simple for the novice either.
The Steps of a Utility Audit
A thoroughly executed Utility Audit will cover the following:
- Your energy usage numbers will be reviewed. Your energy bills should not vary wildly, especially when comparing month to month, and season to season expenses. Carefully auditing these numbers will find billing errors and ensure that you are not being overcharged or charged for the same period twice.
- Rate Structure Analysis. Your auditor knows that you are not simply forced to accept the rate structured assigned to you by your utility provider. They will have the expertise to review the different rate options available to you and select the one that fits. No utility company is going to do that work for you.
- Observe Growth Trends. Periodically certain utility bills surge, sometimes with good reason. If you are in a tropical climate, your energy bills may surge in summertime, and conversely, cold climates will see higher energy bills in the winter. Water bills should remain consistent. Utility audits will uncover these anomalies and go back to the utility company for answers.
The Utility Audit Process
A utility audit will require some work on your part in the preparation phase, but after that we do all the heavy lifting. We will need to look at all invoices from your utility vendors, for all your locations. We will assess each vendor for accuracy.
Next, we will conduct a market analysis of providers, regulatory requirements, your options, and compliance. The entire process takes 4 – 6 weeks. Once you approve our recommendations, we will contact your providers and make the contractual changes for you.
Why a Utility Audit Matters to Your Business
Research shows that over 90% of businesses are invoiced incorrectly at least once a year. If you manage a large business, these expenses can be astronomical. If you manage an SMB, one large billing error can evaporate your cash on hand and paralyze your business. Here are two examples of cost saving opportunities most businesses do not consider:
Water and Sewer: Some of the largest reductions we have helped our clients attain is regarding their water and sewer bills. Not only have we found billing errors, but we have also discovered costly leaks and helped them get credits.
Natural Gas: The gas industry has changed rapidly over the past few years, and there are methods we can use that eliminate some of the risk to your business when it comes to your gas bills.
Who Executes a Utility Audit?
A utility audit may be performed by an internal team, but it is likely that most of your team is swamped doing their regular jobs. Hiring an external contractor who specializes in utility audits is often the best bet. In addition to how busy your team is, there are other reasons to hire an independent utility auditor:
- A utility auditor is an expert at their work, and it will be easier for them to identify mistakes.
- An auditor has experience with a wide variety of contracts and will know how to negotiate with your utility providers. Can negotiate better with utility providers.
- Auditors are familiar with utility providers and know how to expedite the process.
Who Uses Them?
Large multinational companies, and SMB’s may benefit from an in-house auditor depending on the number of utility providers, number of accounts with providers, and total utility spend. Enterprise and SMBs also benefit from Utility Audits. We are experienced working with all three entities.
If you are spending more than $2,500 per month on your utility bills, an audit is highly recommended. If you have questions or would like to schedule a consultation, contact us by email, or call us at (888) 208-0020.
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