The Value of Improving Your Utility Bill Management: Insights and Best Practices
Utility bill management can be complex and time-consuming. Many companies today are incurring utility late fees, missing opportunities for cost reduction, and straining internal resources because their processes aren’t streamlined or efficient.
Tim Porter, Director of Channel / OEM Sales at Urjanet, sat down with Michael Scelzi, CEO of The Energy Control Company (ECC), to discuss utility bill management best practices, insights into new innovations, and how companies can benefit from improving their approach.
With over 30 years of experience, Scelzi, a Certified Energy Manager and serial entrepreneur, holds multiple patents in the energy field, including energy analysis, electrical signature analysis, energy reporting, and determining the insulating value of built structures.
What all goes into utility bill management? How would you define what utility bill management entails?
Michael Scelzi: In a nutshell, there’s a tremendous amount that goes into utility bill management. Utility bill management involves increasing visibility into consumption and cost factors and gaining a better understanding for where improvements can be made.
Oftentimes, companies are doing things manually and it’s a very labor intensive process. Utility bill management solution providers help customers by gathering data, bringing it into one centralized place, and then analyzing it. Utility bill management is extremely complex due to different tariff structures and disparate utilities with different bill formats.
What are some of the challenges that drive corporations to really need a utility bill management solution?
MS: The primary driver is time management. Currently, a utility bill can take up to 20 to 30 minutes of someone’s time to process in an office.
The secondary driver is getting data from utility bills all into one database, so you can understand if there are late charges, missed bills, or adjustments. So, while part of it is about time management, it’s also about gaining insights from large sets of data.
Is there a way that customers typically quantify the value of improving their utility bill management?
MS: Absolutely. A good place to start is to map out your company’s current utility bill process and put a timeline on each part of the process and each time someone touches a bill. It’s important to capture the whole thing, from the mailman bringing a bill to the person who’s in charge of opening the mail, to coding the bill, to uploading it into the company’s accounts payable system. From there, the bill likely needs to be approved by one or more parties and an outgoing check needs to be generated.
That can take a significant amount of time and that’s if everything on the bill is correct. A lot of times with utility bills there are charges that get questioned and errors that are found. So, figuring out how much time and money it takes to currently manage utility bills can help executives understand that cost-effective improvements can be made.
As an expert in this field, what are some best practices you can share about how to manage the utility bill payment process?
MS: First and foremost, you need to get all your utility bills into one database so that operating costs can be compared per square foot. The values you get can be significantly different for a variety of reasons. You want to be able to flag any unusual cost and consumption levels quickly and make sure there are no past dues.
Another benefit to having everything centralized is that you can make sure you aren’t receiving any utility bills from properties you have sold. If you have thousands of utility bills, it’s hard to confirm that you have stopped paying the bill if your utility bill management isn’t streamlined.
How did you collect utility data before partnering with Urjanet?
MS: Prior to partnering with Urjanet, we would actually log into the utility website for each utility account, whether it was for water, electricity, or natural gas. We’d download the bill manually and print it out. Then, we’d actually lay them all across the table and enter the data into an Excel spreadsheet.
It was very much the stone age, if you will. With Urjanet, we launched from the stone age into near real-time acquisition of utility bills. It was a monumental change in our business.
What motivated you to explore alternate utility data collection options?
MS: Before, we had several people collecting utility bills in-house. We were really looking to find a more scalable approach and reduce the time we were spending on data collection. With Urjanet, we were able to redeploy those employees into other parts of our business because of utility bill automation. It’s all machine to machine in the ECC Cloud. It has helped us grow our bill processing and payment side of the business.
How has automating utility bill automation improved your ability to better manage utility payments and forecast future expenses for your clients? Why does it matter?
MS: The forecasting part is important to our owners because utility spend is generally the second largest expense to a commercial real estate owner or tenant. We can now more accurately forecast their next year’s energy expenses and oftentimes adjust it for degree days, so they know what their budget should look like moving forward. At that point, we can establish a profit and loss statement for our clients.
Utility bill automation has also enabled a reduction in late fees. Building owners are often unaware of what late fees they paid in the past and now we have the granular data to show them.
Do you have any specific clients that are good case studies to exemplify the benefits that we’re providing together?
MS: Absolutely. We have a large commercial real estate owner in the DC area who owns a system block. One of his water bills had been trending around the $8,000 mark. We were getting these bills from Urjanet and all of a sudden the charge had jumped to $85,000 on one of the invoices. It was well outside any variance we’d programmed. We immediately flagged it and were able to get it quickly resolved with the utility.
Prior to Urjanet, that bill would have most likely sat in accounting for 20 days and at that point the utility would have started to take action against our client. Sometimes it’s liening the property and things like that. We were able to catch the utility bill error quickly and drive results for our client within a week. Before we had automated our utility data collection with Urjanet, the whole process would have taken six weeks.
What role does interval meter data play in controlling energy expenses?
MS: Interval meter data gives you a more granular view, usually in fifteen minute intervals, that tells us how the building is being operated. With this information, we can help companies improve their operational efficiencies and see how the building is running at each point during the day.
In one instance, we used interval data to find and fix a problem that resulted in $64,000 of savings per year. In this case, we realized that our client’s heating and cooling plant was operating every Sunday for 24 hours, even though no occupants were in the building. We picked up this anomaly within the first week and could quickly show the client results.
Has the increased breadth of utility data points you now receive from Urjanet helped you improve any of your current services?
MS: Yes, we actually built a control side of the business, too, based on the additional data we are receiving. Previously, when we got a utility bill, we had only the total consumption in kilowatt-hours or dekatherms and what was due. With interval data and the other data elements we get from Urjanet, we can really start to understand the characteristics of a building and apply our clients’ business rules to that building. We can more easily figure out if there’s a savings opportunity and if there’s a difference between a client’s business rules and the actual operation of the building.
Additionally, we validate peak demand and demand response candidates by referencing the utility bill and actual peak demand.
Do you see automated utility data as just an operational efficiency improvement or do you feel it has also made you more competitive in the market?
MS: Both components apply. The operational efficiencies are what drive the reduction in dollar expenses for us, which as a business we like. It also gives us a competitive advantage because we can better help our clients identify and then implement capital project improvements.
We recently replaced a client’s boiler, which was running inefficiently. We were able to show them right off the bat that this specific building was performing poorly from an operating cost per square footage standpoint compared to the rest of the portfolio. After replacing the boiler, we could see exactly what the savings were from start to finish with data from the utility bills. Being able to show a client significant, immediate, and permanent savings is very important.
There is a whole AP automation space for general invoice management. What makes utility invoice processing so much more challenging than other types of invoice management?
MS: The utility sector has a lot of taxes that are local to a particular utility company and often local to a city or county. Being able to parse those taxes out and compare multi-region or multi-state buildings without those taxes in it gives you a net energy cost.
When Urjanet sends us a bill, we can parse out the usage, demand, and the associated expense. This is very useful from a project evaluation perspective.
What trends and industry changes are you seeing in the bill automation space? Where do you think it’s headed?
MS: Everything is migrating towards interconnection. I think the accessibility of invoices over the Internet will continue to increase and new technologies can be leveraged to transport that data into centralized systems. Processes will become faster, more efficient, and more automated.
Want to learn more about how Urjanet can help improve your utility bill management processes? Contact us today.
You might also be interested in:
- Expert Q&A: Keeping Track of Your Building’s Energy and Water Consumption Data
- Don’t Let Utility Costs Sink Your Profitability
- Webinar: How to Simplify Your Utility Data
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About Urjanet Inc
Urjanet, the global leader in utility data aggregation, simplifies how organizations access and use utility data, enabling them to focus on their business. Our technology collects, processes, and delivers data from over 6,500 electric, natural gas, water, waste, telecom, and cable utilities worldwide.