As with any type of bill, discrepancies can and do occur on business energy invoices. It’s a well-documented reality that instances of overcharging and tariff errors are common in the energy industry. Over time, these errors could amount to significant, unnecessary losses.
No-one likes paying more than they should, which is why invoice validation should be a critical component of any business energy strategy. In fact, your business could recover an average of 3% – 5% of overspend due to inaccurate bills.
What is invoice validation?
In the energy industry, invoice validation is the robust review of energy bills to ensure any discrepancies are highlighted, acted upon and rectified. The invoice validation process involves cross-checking charges received or billed with amounts paid or received. This can be automated through accounting systems or conducted as a manual validation process.
What causes inaccurate billing?
- Switching suppliers can lead to incorrect data input
- Consumption data is frequently estimated (some organisations’ meters are read infrequently).
- Businesses also may not be aware that they may be eligible for reductions in VAT rate.
What to check when validating invoices
- Contract rates
- Meter charges
- Standing charges
- Consumption data
- VAT rate
How to conduct invoice validation
By conducting ongoing monthly validation, you can be assured that your business only pays what it is contracted to pay for its energy.
- Calculate the correct charges that should have been applied according to your current supply.
- Interrogate the entire supply chain for accuracy to ensure each charge has been correctly allocated.
- Identify errors.
- Reclaim these amounts from your suppliers.
What prevents businesses from conducting thorough invoice validation?
Although instances of inaccurate billing are relatively commonplace and can place a substantial cost burden on energy users, many businesses simply don’t have the time, knowledge and resources to resolve billing issues themselves.
Checking each and every utility bill requires time and effort. This meticulous analysis isn’t an option for many time-strapped businesses.
Top tip for invoice validation
The most effective way to have your invoices validated is to outsource the task. An expert team will quickly be able to identify and rectify billing errors, preventing your team from having to take on this onerous task.
At Smarter Business, we understand the complex world of utility billing so that you can focus on your core business operations. Let Smarter Business conduct thorough invoice validation services on your behalf. We can help you reclaim amounts going back as far as six years.Get in touch to find us more about our invoice validation services.