22/03/2018

Are you being overcharged on your energy bills?

With one in five business energy invoices estimated to be processed incorrectly, the likelihood is yes -- and that can have a big impact your bottom line.  By counting on an expert bill validation and recoveries provider, you can comprehensively reduce your billing risk and save up to 15% per year on utilities. 


When considering options to reduce energy spend, most businesses look to secure a better optimised contract to minimise exposure to Price Risk, or attempt to lower their consumption through the introduction of energy-saving controls and behavioural change.

Whilst undertaking such measures can be a sure-fire way of saving you money, there is one other crucial area that is all too often overlooked – Billing Risk.

Indeed, billing blunders are estimated to cost British businesses more than half a billion pounds a year, with one in five business energy invoices processed incorrectly.

Billing Risk

Business billing risk can come in a variety of forms. Whether by virtue of administration errors resulting from a change of supplier or tenancy, inaccurately applied estimated annual consumption (EAC), various metering or data flow issues, or even over declared capacity that your site doesn’t actually require – oversights invariably happen.

When you consider the sheer complexity and quantity of factors that determine how the total cost of your energy portfolio is calculated, especially across a large number of supplies over a long period of time, it is almost a certainty that discrepancies will occur somewhere along the line.

These discrepancies can manifest themselves on your invoices in varying degrees. Even if any resulting overpayments are relatively minor, over a period of time the accumulation of these charges can result in substantial sums missing from your organisation’s bottom line.

This is money, of course, that could be much better invested elsewhere (on energy management software or an employee engagement programme, for instance) instead of laying unclaimed in a supplier bank account.

Are you being overcharged?

With the mechanics of the billing system as complicated as they are, understanding exactly what contributes to your overall costs can be confusing, to say the least.

Any invoice validation, after all, does not only require rigorous checks against your contract, taxes and other extra charges, but also depends on consumption evaluation and site benchmarking.

For larger businesses with high consumption profiles, piecing together your invoices and consumption data from across multiple different sites further adds to the burden in terms of the resources required, even if you know exactly what to look for.

Many big energy consumers will likely have agreed a flexible energy contract. While this popular method of energy purchasing helps spread price risk throughout the year, flexible contract billing entails extra validation in order to balance reconciliation statements from suppliers and check third-party charges.

These third-party charges, or non commodity costs, are not only seeing the average price of power pushed up, but adding further complexity to invoices – creating yet greater billing risk for businesses.

Rising costs, greater risk

Regulatory changes such as DCP 161 and DCP 228, enforced in April 2018, have only served to enhance the importance of expert bill validation and the comprehensive scrutiny of consumption data so that resulting price rises and billing risk can be fully mitigated.

In simple terms, DCP 228 sees a modification to the way electricity distribution charges are calculated so that pricing is made “fairer and more accurate”. In striking more of a balance between the DUoS bandings (Red, Amber, and Green), costs are spread more equally throughout the day , therefore enforcing a reduction of charges in red zones as amber and green make up the difference and see marked increases.



This means that most business customers will see a rise in costs. However, by working with an expert Bureau provider such as us, we can help you obtain improved contractual terms and ensure that certain elements of your bill, including DuoS, are passed through at cost.

Working closely with your business to develop an energy management strategy, we’ll identify at what times of day your energy-usage is most cost effective, and by helping you budget for future uncertainties and validating your more complex pass-through invoices, we’ll ensure you don’t overpay.

DCP 161, meanwhile, sees a change to the Distribution Connection and Use of System Agreement (DCUSA). Consequently, businesses using Half Hourly (HH) meters that go over their agreed capacity allowance could be hit heavily in the pocket by charges amounting to more than three times the standard rate.

Through our Capacity Analysis service, our Energy Bureau team will ensure your business secures a risk-free and accurately agreed capacity portfolio based on current and future projections of maximum demand.

Be #energyconfident – Reduce your Billing Risk!

At SMS Plc, our aim is to help our clients identify, understand and comprehensively reduce their energy risk, making them completely confident in their energy management strategy.

Effective bill validation – including the ability to efficiently recover historic monies overpaid – requires time and resources, special expertise, and a close working relationship with energy suppliers.

Our Energy Bureau department processes and validates more than 300,000 business energy invoices each year, saving our clients up to 15% annually on their utilities through settling inconsistencies and recovering historical monies overpaid.

While our robust, reliable validation system applies forensic analysis to your ongoing and historical billing data, what really sets SMS Plc apart is our status as a Meter Operator (MOP) and Data Collection and Data Aggregation (DC/DA) service, allowing us much greater insight into the billing pipeline.

This extra insight allows us to untangle some of the more complex issues along the supply chain regarding issues with metering, data flows, and tenant/landlord billing, ensuring a fully comprehensive portfolio management service and enabling us to identify and unlock additional savings for our clients.

Acting as a fully independent partner, we completely streamline your operation and reduce the time spent by your business dealing with energy-related matters. We can also offer you greater financial control, providing you with regular forecasts, accrual and budget reports to reduce future energy cost.

What’s more, our analysis of energy consumption data through our sophisticated, robust and secure data platform is designed for strategic energy management, offering you a gateway to even more savings through the identification and promotion of energy efficiency measures – making your business a completely #energyconfident one.


We know we can make you #energyconfident, why should you be confident in us?

• We come with the trust and stability of a PLC with national and international coverage
• We uniquely work with both energy suppliers and directly with leading blue chip customers.
• We support and advise regional, national and EU government across a range of industry innovations
• We continually invest in both the development of our people and our processes through the deployment of the latest technologies
• The complete range of services we provide are delivered via our own in-house teams, completely differentiating us from anyone else in the market.


Contact us today to discuss how we can help your organisation reduce its billing risk. Call us on 02920 739 540 or email us and we'll get back to you!

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