Request a Refund for your Utility Security Deposit
One of the worst kept secrets in the utility industry, yet a method that many corporations hardly utilize is requesting refunds for security deposits on utility accounts. It is common practice for many utility providers to refund a security deposit in full (for businesses) who have at least 90 days of good payment history if requested. Utilizing an expense management consultant like RadiusPoint© not only ensures that invoices are processed and paid on time in order to earn that good payment history status, but we can also perform the tedious task of researching utility accounts and requesting refunds for you!
What’s the advantage of requesting money back on utility deposits for locations in states that require deposit money to be placed in an interest bearing account?
Minnesota, as well as many other states throughout the U.S., is an example of a state that has passed legislation requiring utility deposits to gain interest: “privately or publicly owned water, gas, telephone, cable television, electric light, heat or power companies shall pay a specific interest rate on customer deposits” (Minn. Stat. 325E.02 (b)). The interest rate for this type of account in 2013 is a measly 0.2%.1
What does this translate into?
Suppose your company has opened some new locations this year in the state of Minnesota with utility deposits totaling $25,000.
$25,000 X 1.6% annual yield = $400 returned for utility companies holding YOUR MONEY one year later.
The amount of money your company potentially has sitting in low-return accounts is outrageous. When setting up new clients with RadiusPoint©, we see thousands upon thousands of dollars tied up in security deposits at locations that were opened years ago which, more often than not, the client has totally forgotten about! RadiusPoint promptly requests refunds for dozens, sometimes hundreds of accounts, putting money back in the clients’ pocket to invest in the future.
What can your company do with that $25,000 spent on utility deposits for those new locations 90 days ago?
1 “Utility Deposit Interest Rates.” State of Minnesota Commerce Department.
Submitted by a RadiusPoint© billing analyst