Running a business is a non-stop tug-of-war between cash inflow and outflow. Growing revenue and reducing operating costs will help achieve this increase. Those operating costs come in a myriad of ways. Any step taken towards their reduction improves the bottom line of the company in the long run.
Utility bills are the often ignored entities when considering operating costs. The invoice value is presumed to be accurate and thus paid without review. This oversight could very well be bleeding money for the company. A utility bill audit is necessary to prevent this bleed.
The Factors That Have a Bearing
A business relies on several utilities to keep it running. They each have their infrastructure and billing methods considerations for the process. Utility bill audit companies stay up to date with these details and provide you the best of service. They will go through the many factors that influence the final amount to bring it down to the maximum extent.
The Types of Utilities Used
Not every business is the same; some have specific utility requirements that others don’t. For example, restaurants need a steady supply of cooking gas that a small IT company doesn’t. Electricity, water, and sewerage are, however, commonplace. An auditor will have to consider every one of these and work to create a comprehensive report accordingly.
The manner of conducting the audit for each will vary. Safety regulations for each type are different, so checking for leaks and poor connections will employ specific methods for each. Faulty electrical connections won’t leak electricity, similar to how faulty water or gas connections will leak either of those things. The report must reflect the same.
Different businesses will have different consumption levels of utilities. A car wash will consume water in amounts that a bread-making factory won’t. Their average consumption will vary as a result, which must be accounted for while conducting the audit.
Reviewing the business’s past invoices will help arrive at an average consumption figure for that utility’s billing cycle. The industry-based average consumption provides a baseline to compare the business’s average consumption.
This comparison will make it easier to identify any unexpected excesses existing in the business’s consumption levels.
Energy auditing for companies goes beyond just reviewing invoice issues by utility agencies. Since the equipment consuming these resources also has a significant influence on the final payable amount, they need to be checked for various factors too.
Older buildings/businesses might have old models of equipment still running the show. The problem with those is they likely won’t be manufactured to present efficiency standards. They will thus consume more of the resource, increasing the invoice figures. Incandescent bulbs vs. LED lights are an example of this. The latter consumes far less power for the same output, bringing operation costs down in the long run.
Old pipes could also be leaking resources like water and gas due to corrosion or loosened fittings. They would be a serious safety hazard while also draining your finances. HVAC system capacities should match the building’s requirements well, or else it too will consume more power than the building needs.
These impacts need to be considered as well while sifting through the numbers.
Data Analysis Methodology
The final stage of the audit process is the analysis of the data gathered during the assessment phase. The data analysis happens in terms of energy and cost. The methodology applied will depend on many factors like the industry in which the business operates, its goals, types of utilities, etc.
The energy data analysis methodologies typically used are engineering formulas-based spreadsheet analysis and whole-building hourly energy use. The former works well to account for variations in usage based on seasons and time-of-day. The latter works well for large buildings or even smaller ones with complex mechanical systems.
The financial methodologies implemented typically are the simple payback period, life-cycle cost, discounted payback, and internal rate of return. The factors considered by these methodologies include present costs of energy, implementation costs, and long-term savings potential. You can provide the methodology the auditor will use for the analysis.
Other factors, like tax credits and utility incentives, should also be added for accuracy. The data accuracy can’t be overstated here as false or incomplete data sts can lead to unwanted costs and losses. Precautions, like quotes from multiple vendors for the same equipment, help ensure data reliability.
Business operations are a complex process without utility bills causing problems. A utility bill audit will ease the burden of paying for losses incurred by oversight and faulty equipment.