One of the most significant overhead costs for any business property is its utilities. Just as homeowners have various utility bills they have to pay on a monthly basis for key services, businesses too are on the hook for water, sewage, gas, and electric bills as well. It’s estimated that businesses spend about $2.14 on utilities per square foot per month. For a 5,000-square-foot building, this can amount to more than $10,000 per month. Noting this, it only makes sense to conserve this overhead cost if you can, especially with energy prices expected to climb over the coming months and years.
While there are various strategies for curbing energy costs in a commercial facility, one practice that should absolutely be considered is a utility bill audit. Much like the name implies, a utility bill audit involves a professional auditor analyzing and assessing your utility bills and relationship with utility companies to discover cost-saving opportunities. Even a savings of 10 percent can represent significant long-term savings. In this post, we’ll take a closer look at the utility bill audit process, benefits, and more. Here’s a closer look:
Business Utility Audit Process
A typical utility bill audit will consist of three key steps:
1. Research
This initial step will likely consist of an auditor carefully reviewing your business’ past utility invoices to help understand the way your property has been billed over the past several years. This helps an auditor determine the relationship between your property and the utility companies, payment history, and it also helps an auditor determine what a property’s service needs are and whether or not they’re being adequately met.
2. Review
The next step will often consist of a thorough review of the information gleaned in the first step and an assessment of potential options as it pertains to utility processes. Auditors may also hold a series of interviews with property managers and other decision-makers to better understand how any utility decisions were made in the past. Communication with the specific utility companies in question may also be a part of this step so that specific recommendations can be articulated better in the third and final step of the utility auditing process.
3. Recommendations
The third and final step tends to consist of specific recommendations that property managers can enact to reduce utility costs. Some recommendations that are presented may include renegotiating contracts with utility companies so that properties can get a reduced rate on services. Other recommendations may include changing the way certain utilities are billed based on what a facility truly requires. In some cases, the auditor may even suggest switching to an entirely different service provider to save costs. An auditor will review these recommendations and present a cost-savings overview for each recommendation. If approved by the property manager, they’ll begin working to implement the solutions.
Benefits of a Business Utility Audit
As we’ve noted throughout this piece, perhaps the biggest benefit associated with a utility audit is the cost savings that are associated with the practice. Even a 10 percent savings on a $10,000 per month utility bill represents a $1,000 savings per month and a $12,000 savings per year. When a utility bill audit is complemented by an energy audit to explore energy efficiency improvements, the savings can become even more significant.
There are a few other key benefits associated with utility audits as well, such as:
- Reduced overhead: All properties budget for overhead costs like gas, electricity, water, and sewage. And if properties are able to experience a decrease in one line item, it frees up the opportunity to invest in other parts of a business operation. For example, a firm might put the money it’s saving on utilities toward an innovative new technology to help workers do their jobs safer or more efficiently. Or maybe the savings are passed down to the workers in bonuses or other benefits.
- You have nothing to lose upfront: Most utility bill auditing companies don’t get paid until they can discover cost savings for your firm. In other words, you really don’t have much to lose by exploring a utility bill audit.
- It can discover billing errors: Aside from negotiating with utility companies, switching service providers, or changing the way properties are billed, a utility audit can also sniff out any errors. There are documented instances of businesses being refunded tens of thousands of dollars due to sales tax errors, incorrect billing of kilowatt hours billing based on consumption, and more.
Another key benefit of a utility bill audit is that it can be easily paired with an energy audit. Energy audits involve the careful assessment of a facility to determine its energy efficiency and then a presentation of means – both big and small – to help a facility become more efficient and curb costs. Some of these recommendations may involve upgrading insulation or HVAC equipment. Even small things like switching to LED lights or automatic light timers can make a difference.
When it comes to saving energy or curbing utility costs, it’s often not one big thing that can help a facility achieve its goals, but a variety of small things that all add up to make a big difference over the long term. A utility bill audit combined with an energy audit are two strategies that complement each other well and can yield significant savings.
Green Line Rates Can Help You!
For more information on a utility bill audit and the benefits of having one done on your property, contact Green Line Rates today. As experts in all things related to commercial energy, our consultants will work with you to help your property achieve its energy goals. Contact us today to learn more about how we can help you with an energy audit or utility bill audit.