Keep an eye on the invoices – Alan Little
As well as introducing energy-saving products and behavioural controls, savings can also be made by fully validating utility invoices.
Suppliers’ tariffs and invoices can be very complex and difficult to understand. As a result it is inevitable that some billing errors will be missed. With flexible and energy only contracts becoming a more popular way of buying energy, additional validation is required to balance reconciliation statements from suppliers and check third party charges.
Traditionally, the processing of utility invoices has been a manual process, where paper invoices are entered onto a spreadsheet or energy management software system before being passed to the accounts payable department.
If any errors are found in these invoices, the suppliers will have to be contacted to resolve the errors found. Some of these errors can be complex and difficult to explain.
The accounts payable department must then enter the same invoices into their accounts software so that they can be paid on time.
It is also usual to withhold any invoices with errors from the payment process, which then leads to reminder bills and sometimes disconnection notices to be received.
Invoice validation does not only require rigorous checks against contracted rates, network charges and taxes, but also relies on consumption comparisons and benchmarking against comparable sites.
Validation of utility invoices has become even more important since two of the top six energy suppliers changed their billing systems last year, which left many of their customers with either incorrect invoices that may have been paid without realising, or no invoices at all. For some organisations, not receiving billing for a long period of time can cause internal issues with budgeting and accruals, especially if these charges need to be included in service charges.
STC have been processing utility invoices for over 20 years and estimate that between 3 and 5 per cent of utility expenditure can be saved by fully validating supplier invoices.
To read the full article see the latest October edition of EiBI.
