Utility costs are the most significant expenses regularly incurred by a business. For organizations that use a large number of utilities, the fees can reach thousands or even millions due to errors in your gas, electricity, water, and phone services. When your organization has multiple branches and locations, it’s easy to miscalculate amounts or make forecasts based on outdated or incorrect details.
Also, wrong payments are often paid out when accounts payable personnel don’t have the time or the know-how to interpret the charges and taxes of each bill. Fortunately, you can hire a utility bill auditing company like Util Auditors that will get to the bottom of each financial matter. Read on to learn more about what a utility bill audit includes, the benefits it can provide, and how you can get started with a utility bill auditing service.
What Is a Utility Bill Audit?
A utility audit is the process of reviewing a business’s utility invoices to uncover any billing errors. Although an in-house team can handle the project, you can also hire a third party to help in the utility audit program. The entire audit process focuses on identifying and resolving possible errors in the company invoices. These can include:
- Not closing or opening accounts on time
- Incorrect late fees
- Your business is being billed for wrong rate plans
Utility audits encompass a wide range of business invoices, including electricity, waste management, natural gas, water, or sewer services.
4 Key Benefits of a Utility Bill Audit
Your utilities are a substantial set of expenses to your business. Some business owners tend to brush off these audits. However, both small and big companies need to stay vigilant and look for utility bill errors.
Here are four common benefits of a utility bill audit for your business:
1. Uncover Costs Utility Billing Errors
You might assume that small errors cannot have a significant impact on your business, but even the slightest error in your audit can cost you hundreds or thousands of dollars each month.
For instance, errors in reading your water meter, such as a wrong digit in your visual meter reading, can result in soaring bills. An error can also make your business get to a rate that doesn’t match your needs.
To mitigate such errors, you need to hire a utility bill audit company that regularly audits your bills before making the payments. Working with a utility bill audit company is particularly important for businesses with multiple locations. In those circumstances, your utility audit program will be more complex.
One of the main reasons for an audit is to comply with the industry regulations and align your business to the statutory requirements. An audit ensures that your business is 100% compliant. If you are non-compliant, you risk incurring huge fines, a tarnished reputation, and loss of customers.
3. Generating Credits or Refunds
During utility bill auditing, you or your auditors can notify the specific utility providers of errors discovered during the process. Once the providers confirm the error, they can either credit your future bills or refund the overcharges you overpaid.
You also need to track and document the errors captured in your utility bills and the resolutions to ensure you have a record with the utility company. Note that you shouldn’t consider any billing errors to be too old to ask for a credit or refund, especially if the error costs your business money.
4. Identifying Cost Saving Opportunities
With the support of experts in the bill auditing processes, you can identify the areas that can reduce your costs. For instance, making some improvements in your energy efficiency within your business can lead to significant benefits. After the utility audit process, you can identify the possible gaps leading to wastage. Then you can develop a plan on the best ways to minimize your monthly expenditure.
Why You Need to Complete Your Utility Audit Before the End of the Year
A utility bill audit is the highest form of review in an organization’s financial records. It should be done before the end of the year because:
It Corrects Financial Problems
Scheduling a utility audit before the end of the year will reveal any issues concerning the finances in your business. With the assistance of an auditing company, you can have suggestions on the most effective ways to modify various processes and improve your operations for the new year.
It Helps Identify Weaknesses in Your Accounting Procedures
A utility audit reveals details regarding non-compliance, liabilities that could negatively impact your future finances, and more. Apart from weaknesses in the accounting processes, utility audits also trace transactions to authorizations and review legal documents. The sooner you catch potential errors and violations, the better.
Who Can Assist You With This Service?
Utility audits can be time-intensive and interrupt your normal operations when you handle them internally. Util Auditors can take care of all the hassles in the utility audit process. Contact us today for help identifying significant discrepancies and opportunities to reduce costs or standardize operations in your business.