With utility costs consistently ranking as one of the top five organizational operating expenses, reducing resource consumption remains a top priority for most finance leaders. But few realize that an opportunity with great savings potential and long-term lies buried within their utility bills—an opportunity that can be unlocked simply by examining those invoices more closely.
Reaping the full potential of managing these complex payables, however, can be an intricate and costly process. Many companies simply don’t have experts who can address the intricacy of these invoices or the tools to process and capture data accurately and efficiently. Instead, the responsibility falls on the already overburdened accounts payable team. The more complex invoices, the higher the spend and the greater the opportunity—yet the sheer number can be overwhelming, making it nearly impossible to perform the level of analysis required to uncover errors and anomalies and capture quality invoice data. This rich data, which can improve forecasting, is vital to granting insights into consumption trends and uncovering opportunities for efficiency improvements.
Take a closer look at complex payables to drastically cut costs and offset rising prices, starting with these common issues.
Telecom invoices: Plan optimization remains the most frequent telecom challenge. Telecom companies notoriously promote the latest data and access package and load clients up with extra features and fees. Consequently, companies have more lines and circuits than they will ever need as well as unused services and features. Without adequate time and staff to review the bills in detail, these unnecessary costs often go unnoticed.
Energy invoices: Up to 6 percent of energy bills are reissued due to errors and incorrect meter readings. Meanwhile, balance forwarding and rebilling from estimated meter reads can be costly. With hundreds or even thousands of meters, it can be daunting to keep track of energy usage. But once the cause of energy invoice errors is identified, these resolved issues bring significant savings.
Water invoices: Pushing through the complexity of water invoices reveals opportunity. Water meter reads can be incorrect or vary from the estimate, yet water companies often bill an estimated rate without correcting the discrepancy. To complicate an already intricate billing process, water utilities sometimes measure water usage in different units.
Waste management invoices: Waste management is informed by many variables, from pick-up frequencies to container sizes, tonnages, extra trips and seasonality. Often, multi-site companies have little insight into the actual waste services they’re receiving, and bills can differ from month to month for the exact same service making them difficult to compare and forecast.
Accurately captured and tracked invoice data can lead to improved operations and information about consumption trends and outliers, including:
Increased accuracy of organizational budgeting and forecasting. An accurate budget relies on access to many data points, a process often hindered by bill complexity. Bill data should be combined with weather, market pricing and changes in operations of your facilities to help achieve budget accuracy. But it’s the accuracy of invoice data that can truly make or break your budget and forecast. Incorrect or marginally captured data will result in unrealistic goals that can’t be met.
Data-driven insight. Once a finance leader gains a comprehensive understanding of their energy, telecom, waste and water usage, they are empowered to both track and control this spend. The data mined from these payables can yield additional savings across the organization and enable leaders to meet sustainability goals through efficiency initiatives such as lighting and technology upgrades, strategic energy sourcing, and carbon reduction projects.
Leverage the data-points already at your disposal. Many finance leaders are moving into a strategic advisor role in their organizations—balancing more responsibility than ever before. Using data as a tool, particularly data that’s already available, is paramount to lowering utility-related costs, taking the risk out of energy efficiency investments, and driving meaningful change across the organization.
Watch this short video below to learn more about how data from your organization’s complex payables can serve as a solid foundation for future initiatives and benefit your bottom line.