There are numerous fluctuating costs to consider when running a business. These soon add up if left unchecked, causing a serious dent in your profit margin.
The recent increase in energy prices is one cost that’s caught many of our clients off guard. Those in the manufacturing, hospitality, and retail sectors have been most affected, with some experiencing a 100-200% increase on the price of energy compared to this time last year.
When you’re suddenly faced with energy bills nearly three times higher than you’ve budgeted for, those ‘hidden’ costs become all too apparent. Adapting your approach to managing fluctuating energy prices could be the difference between making a profit or a loss for some businesses.
But do you know how to find the best deals for your industry, and who to contact to action savings?
Energy cost management
If you’re at all in doubt, seeking advice from a recommended energy consultant can reaffirm that you’re on the right path. They can also point you towards areas of improvement, and once identified, offer support in helping reduce costs for your business.
At CTT Accountancy, we’ve teamed up with partners SeeMore Energy, to give our clients strategic insight into their energy bills and find ways to help them minimise the impact of the energy crisis while managing costs more effectively.
Common costly mistakes
“By looking at their energy data, which profiles times and dates of usage in a clear way, businesses can identify patterns and trends in energy use,” says SeeMore Energy director, Craig Watson.
“Any business that operates 24/7, particularly those within the manufacturing or hospitality sectors, can usually find a few quick wins to improve efficiency with good housekeeping, like the effective shutdown of machinery that’s not being used,” he says. “More intensive energy users should regularly audit the equipment and processes to ensure no energy is being unnecessarily wasted.”
“At SeeMore Energy, we create a simple dashboard to showcase and evidence periods where energy is being used most, with averages and trends. This allows business to zone in and focus on discussing areas for improvement that will have the most impact,” he adds.
A proactive approach to cost saving
“One of the most common mistakes businesses make with managing their energy is failing to engage with the market early enough, to sound out what renewal options might look like,” Craig reveals.
“Early engagement to create a more strategic approach is key to managing the impact energy price increases could have on most businesses.”
SeeMore Energy’s advice for reducing energy costs:
- Engage with a consultant who can provide a desktop ‘Health Check’ to ensure your business is contracted correctly and being invoiced accurately each month.
- Confirm when your existing contracts are set to expire and get an early appreciation of what renewal tariffs might look like.
- Develop a strategy that allows your consultant to monitor the market on your business’ behalf, only engaging when prices require further attention and discussion.
- Consider the potential of an energy audit at site which could help you improve the site’s efficiency by implementing energy-saving equipment.
- Relax and have confidence your energy management is being supported by an expert with your best interests in mind.
Since working with SeeMore Energy, CTT Accountancy has negotiated new deals for both gas and electricity, achieving a 30% saving per year for electricity and 35% on gas.
If you’d like to gain a better understanding of how to save on your business’ energy costs, send a copy of a recent energy bill to us at CTT Accountancy. We’ll run an initial desktop ‘Health Check’ with See More Energy and suggest the next steps you can take to reduce your energy tariffs.
Implementing an energy saving plan is just one way to reduce overall business costs and increase profitability. For more practical advice on how to manage your business accounts, contact us at CTT Accountancy.