How do you Manage Utility Expenses?
Last week, we introduced you to Utility Expense Management. This week, we will be diving into some of the details of Utility Expense Management (UEM). Although Utility cost rank as one of the highest costs, many organizations typically do not put a lot of thought into the management of invoices, services and costs. So how do you ensure accuracy and eliminate the risk of costly errors?
First, we will address the organizations that are at most risk of being affected. Typically, companies that have multiple locations have more risk. This is due, in part, to dealing with more invoices and vendors than other areas (for example telecom). With utilities, you have different tariffs, rates, consumption, etc. Many organizations have an AP department/billing department that “reviews” their invoices and pays them. For most the review consists of a glance at the total charges and, if there is not a variance of more than a specific percentage, then it is paid. Imagine having dozens, hundreds or even thousands of locations that are paying this way to multiple vendors at each location (i.e. water/sewer, electric, gas, etc.).
By having a quick glance there is no way to know if the invoices are accurate. On the other hand, how much time would be invested from your team to actually review your monthly statements? Ensuring the charges are per contract rates, consumption meets with company usage compliance, there are no unnecessary add on charges, the taxes and tariffs are billing accurately, etc. These tasks can be awfully tedious and that is typically their only job function! You have a limited amount of time to review the invoices, get them approved and paid to avoid late payment charges (or service disconnection). Managing these expenses can put a burden on your enterprise’s Finance and Operations staff, producing unnecessary bottom line costs. This is where Utility Expense Management comes in to assist.
At RadiusPoint, we work with our clients to:
· minimize workload
· streamline processes
We take a consultative approach to ensure each client is set up accurately from the beginning. This begins with the setup for each of our clients. Our efforts verify every line is accurately set up in our software, ExpenseLogic, including the line identifier (meter number, etc.), where it is located, who/where it is assigned to, accounting codes, and much more on one easy to use platform. During the setup, we determine if rates can be negotiated at any of your locations, we can review the services to make sure all services are on the most cost effective service plans, billed at correct rates, have usage, etc. Every line is organized in ExpenseLogic to match the contract/tariff rates and usage limits based on company compliance rules. We provide clients with detailed recurring line item audits of their utilities, which hunt for exceptions in the system to identify leaks and other inefficiencies in the system. We also provide an unparalleled approach to utility bill analysis that helps your business maximize value from your utility services going forward.
Identifying an experienced utility expense management team will not only uncover potential savings and optimize expenses, but will also allow you to put the time and money back where it belongs – into your organization. For over 26 years, RadiusPoint has done just this and will continue to. Watch for upcoming articles that will provide more insight into these services and our Utility Watch services, which cover Carbon Footprints & Energy Efficiency, in the coming weeks.