Key Takeaways:
- Complexity: Business energy bills can be challenging to understand, necessitating a clear grasp of the various components.
- Three Key Factors: Total energy usage, standing charge, and taxes or levies all contribute to your energy bill.
- Key Contents: Your bill should contain specific information, including billing date and number, supplier details, contract information, reading type, and VAT charges.
- Optimization: Understanding your energy bill helps optimize your expenditure and avoids unexpected costs impacting your business’s overall performance.
Introduction
Business energy bills can seem complex and often daunting to understand. But taking the time to fully understand them can empower businesses to optimize their energy usage and save money. Jack Arthur, an energy expert at Uswitch for Business, shares some essential insights on understanding and making the most of your business energy bills.
Key Factors Influencing Your Energy Bill
The total on your energy bill is not just based on how much energy you use. It’s calculated based on three factors:
- Total energy usage – The amount of energy you use in kWh will be multiplied by the unit rate on your tariff.
- Standing charge – This flat daily charge covers the cost of getting energy to your property, regardless of how much energy you use.
- Taxes and levies – Additional charges, like VAT and the Climate Change Levy, are included in your bill.
Any eligible discounts from suppliers or the Government will also factor into your bill’s breakdown.
What You Should Find on Your Bill
Though different energy suppliers may lay out their bills differently, they should all contain the same essential content. Here’s what you should find on your bill:
- Bill date, bill number, and your business’s VAT number: If these details are incorrect, contact your supplier to avoid overpaying or underpaying on your VAT.
- Account number, supplier, and their contact details: Keep note of these, especially if you have different suppliers for your gas and electricity.
- Contract information: This includes the name of your plan, its renewal date, and the contact needed to discuss your plan.
- Billing Period: This could be monthly or quarterly and can be helpful for budgeting.
- Reading type: There are two types – Estimated readings and Actual readings. The latter is more accurate and should ideally be sent to your supplier monthly.
- Outstanding balances from previous bills: This can vary depending on the time of year.
- Balance from the current billing period: This is broken down into the unit rate and standing charge.
- VAT charges: Ensure you’re paying the correct amount and check if you can reclaim any VAT.
- Total amount owed: This section indicates when the bill needs to be paid by to avoid late payment fees.
- MPAN or MPRN number: These numbers are used by suppliers to identify the type of meter being used at your property.
- Breakdown of charges: This gives a more detailed view of how your charges are calculated.
The Importance of Understanding Your Energy Bill
In times of higher energy costs, it’s even more important to understand your energy bill. This knowledge allows you to optimize your expenditure where necessary and avoid unexpected costs, which could impact your business’s overall performance.
In conclusion, by understanding the components of your energy bill, you can take control of your energy expenditure, enabling you to strategically plan your energy use, minimize costs, and contribute positively to your business’s financial health. Remember, as complex as your energy bill might seem, it can be deciphered with the right knowledge and insights.
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