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Facility managers discussing the results of utility bill auditing for manufacturing

Utility Bill Auditing for Manufacturing: 5 Reasons to Start a Utility Audit Program

Utility bill auditing for manufacturing companies is one of the biggest ways to cut costs. In 2018, the industrial sector accounted for about 32% of all energy consumption in the US. In 2020, manufacturers accounted for about 77% of total annual industrial sector electricity purchases. For manufacturing companies, these numbers translate into skyrocketing utility bills. However, it’s a necessary expense when you consider that over half (51%) of US manufacturing electricity consumption comes from running large machines. Manufacturing companies hoping to cut utility costs typically face the potentially bigger cost of downtime, leaving little hope for change. 

Still, none of these numbers reflect the cost of utility billing errors in manufacturing. It’s estimated that 80% of utility and service billing statements contain errors. In a large manufacturing plant, a single erroneous line entry could cost your company hundreds of millions of dollars. So, how can companies uncover these errors without facing expenses related to downtime? A utility audit can help you uncover billing mistakes and also pinpoint practices that waste energy. A recurring program of utility bill auditing for manufacturing can then take those savings a big step forward to help you consistently identify billing errors and maintain energy-saving practices for the long term.

What Is a Utility Audit Program?

A utility audit provides an end-to-end analysis of utility bills (including electric, gas, water, sewage, and waste) to uncover discrepancies, remediate errors, and cut costs. A typical one-time utility audit will likely result in a substantial rebate check and some important information about changes you can make within your company to save energy.

A manufacturing utility audit can investigate:

  • Billing errors
  • The energy efficiency of HVAC systems
  • Energy consumed by large machines
  • Use of energy from refrigeration and freezer units
  • Ways energy goes to waste during the manufacturing process
  • How employee habits contribute to energy consumption

A utility audit program provides ongoing utility audits through end-to-end utility auditing services. These routine audits uncover the reasons your utility bills increase or fluctuate over time. The utility audit program provided by Util Auditors allows you to track the progress of each audit in real time and download a report at any time during the process. Once a formal report is provided, Util Auditors will assist you in implementing cost savings and obtaining the refunds we identify.

5 Benefits of Utility Bill Auditing for Manufacturing Companies

Manufacturing professionals assessing the results of a utility audit program

A utility audit program is designed to investigate one of the biggest overhead costs for manufacturing companies. A combination of billing errors and poor practices can mean you’re paying thousands more than you need to every month. By addressing these issues, you can:

  • Earn rebates
  • Save money over time
  • Run your company more efficiently

1. Uncover Ongoing Utility Billing Errors

A single billing error can cost your company hundreds of thousands of dollars. If this error reoccurs consistently, it can raise your energy costs exponentially. Utility billing errors can occur because of human error, meter issues, and miscommunication. A single-digit error can result in a major change of a single bill. If the issue is ongoing or another error occurs a few months down the road, your routine audits will catch each error and share the information with your utility provider.

2. Identify Energy Saving Practices

It’s true that manufacturing companies need a considerable amount of energy to run large machines, maintain refrigeration and freezer units, and even keep the lights on and heat running 24 hours a day. Still, with the capability to see where your company loses the most energy, you can make changes that will save money each month. By utilizing energy-efficient practices and investing in energy-saving equipment, you can minimize your energy use and save money through energy-conscious practices.

3. Put Money Back Into Your Account

Billing errors aren’t a sign that your utility company is trying to cheat you. In fact, losing the business of a major company would cost them more than refunding the cost of billing errors. 

When audits are complete, you can use the results of those audits to claim a refund from your utility company. An unresolved, undeserved late fee can add up over time, leading to significant extra costs. A damaged meter could lead to months of extra payments. But a clear audit can help return that money to your business.

Multi-site companies receive hundreds of complex utility bills each month. Taking time from your staff’s busy work schedule to investigate each invoice could lead to bigger losses in time and productivity. When these audits are performed and refunds are obtained by experienced auditors, your staff has time to concentrate on keeping your company running properly.

4. Improve Your Brand Image With Utility Bill Auditing for Manufacturing

Consumers understand the importance of energy conservation. When surveyed, nearly 8 in 10 respondents said that sustainability is important to them. Also, over 70% revealed they would pay a premium of 35%, on average, for brands that are sustainable and environmentally responsible. Consumers seek environmentally conscious brands. In fact, they’re willing to pay more for products created by brands with values that align with their own. When you invest in a utility audit program, you’re making a commitment to consistently work toward energy conservation goals.

5. Take Advantage of Tax Exemptions

Certain federal, state, and local laws exist to help large companies benefit from energy conservation tools and practices. Depending on your location, you may be able to claim tax exemptions that will reduce your energy bills and allow you to invest in new equipment. Manufacturers of products are eligible for a tax exemption on the portion of their utilities that go towards the creation of their products. Your routine utility audits can provide up-to-date information for you to calculate these percentages and then determine how much of your utility cost is tax-exempt.

Final Thoughts on Utility Bill Auditing for Manufacturing

When the cost of utilities is one of the most prevalent overhead costs in the manufacturing industry, investing in a savings plan can have a major impact on your bottom line. Conducting a single utility audit can put money back into your account. Participating in an ongoing utility audit program can help you save millions over time. The effort you put into running your business shouldn’t be wasted by throwing away your hard-earned money on utility billing errors. 

Learn more about how you can save with utility auditing for manufacturing and other programs from Util Auditors.

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