When we look at our energy and communications invoices, do we actually understand the make up of the account or do we just look at the invoice total and move on. We say to ourselves “I must reduce the spend on that soon”. Does that soon ever come around? Or does a supplier fall in through your door some day with this fantastic offering that you just can not refuse to take? You sign up for a twelve month contract again! And after three or four months you are looking at the invoice total again and wondering where is this “fantastic offering”? Where are those savings?
Can you ask yourself these 4 questions?
- Do I completely understand packages and bundles on my mobile account?
- Do I completely understand my landline charges and how to secure a package most suited to my call pattern to reduce cost?
- Have I ever had an energy audit completed to ascertain how I would reduce my energy usage and reduce cost on my energy?
- Do I have my energy supply tendered to suppliers to achieve the best rates available?
If you have answered no to two or more of the questions above then it is more likely that your competitors might have the edge on you in controlling their costs ! Do you really want a situation like that?
We can call to your office free of charge and we can go through what you could be missing out on and how Auditel can help you reduce your costs. This meeting is free and our fee’s are structured on shared savings so our clients are on a gain from day one.
There is no excuse to not have the best available tariffs.
Escalating energy costs have become a major headache for Irish companies of all sizes. Over 60% of electricity is generated by natural gas sourced from the U.K. and the weakening Euro has elevating the cost of electricity production in Ireland over the recent years. The rising cost of capital has also forced increased transmission and distribution costs on the market (expect another 7% increase in October). In a market place where inflation is running at an all time low, such a rise in a non-core cost eats directly in to bottom line profitability.
How can Finance teams combat this rising cost?
By actively managing both energy unit cost and consumption, organisations place themselves in the best possible position to minimise this cost factor.
Sounds easy? Maybe not.
Within Irish organisations today, in-house resources for managing non-core costs have become increasingly stretched. To become familiar with the market players and the industry terminology used is time-consuming and ultimately distracts from essential core activities. Deciphering “DUOS” charges, “TUOS” charges, “SEMO” charges, Capacity charges, Multi-tariff rates, etc. etc. is a minefield and requires expertise not normally found in finance departments. Comparing rates from competing suppliers has become increasingly complicated and selecting the “best deal” requires in-depth analysis.
So what is the solution?
By outsourcing the management of energy cost, the following benefits will arise.
- Ensures lowest possible cost for energy purchase
- Ensures strategic management of energy consumption
- Releases in-house resources to concentrate on core activities
- Allows peace of mind, in the knowledge that this cost is being actively managed by experts
Sounds great, but what is the cost?
Auditel can provide this service on a contingency basis with no direct cost to the client. Payment is made through shared savings with no upfront fees. We can take over management of your energy costs today and your organisations bottom line can improve immediately. If there are no savings, then there is no cost. So the question instead of being “Why?” becomes “Why not?”
I’m sure it doesn’t surprise many people to know that energy costs are rising in Ireland. The recent Bord Gais Energy Index shows that July saw the biggest jump in several months. The index rose 8% in July to 144. One of the reasons for the rise in Irish energy costs is the weakening Euro. While your guess is a good as mine as to what the Euro is going to do over the coming months, it is hard for me to see it strengthening any time soon.
Keep in mind that it isn’t just heating oil and diesel that are affected by this Euro trend. Most electricity in Ireland is produced by burning natural gas. Much of our gas comes from the UK and so the weaker Euro vs the British Pound is increasing the cost of electricity. Some additional factors can be found in this article.
What action can you take as a result of this information? My first suggestion would be to schedule an Auditel Business Health Check. This is an examination of all your business overheads expenditures, including electricity, by a qualified Auditel consultant using our unique Total Cost of Purchase approach. It takes into account both the direct and indirect costs associated with making effective cost management decisions. This service, coupled with our performance driven contingency fee model means that our service can be totally self funding.
When was the last time you reviewed your energy costs? If there is any way to reduce your energy costs and improve your bottom line, Auditel will take the time to find it for you!
Auditel, the UK and Ireland’s premier cost management consultancy, generate savings for organisations over an enormous range of business expenditure. Last month, they added yet another opportunity to reduce both cost and energy – LED lamps.
The quality and performance of LED replacement lamps has come a long way in the last few years. Their hugely improved light quality and low energy consumption means that businesses can save up to 80% on their energy bills by installing LED lamps in place of their existing halogen or incandescent bulbs.
In the face of ever-increasing energy costs, companies are searching for ways to save energy. Increasing insulation, upgrading boilers and self-generating power can be expensive and disruptive to the business, often with a slow return on investment. Simply replacing existing lamps with LED is fast, easy and highly effective. For example, a typical halogen spotlight that uses 35W of energy can be replaced by a 6W LED, leading to energy and cost savings of an impressive 80%.
How Financial Directors can Regain Power Over Rising Energy Costs Impacting Their Organisations’ Profits
Wholesale energy prices have soared in the last six months as high oil prices continue, the Middle East is uncertain and the nuclear disaster in Japan causes concern. The major energy providers have passed these price increases on to their business customers. Many face energy bills which could be 50% higher than they were paying only two years ago.
In June 2011, the FT and The Economist Business Barometer Research found that leaders foresee the biggest risks to their businesses to be rising costs of oil, commodities prices and interest rates. This prompts greater scrutiny of their profit margins and higher expectation for financial directors to perform in challenging times.
In July, after a second major British energy supplier announced double-digit tariff increases, RWE npower reported: ‘Three hundred major and small energy user companies counted energy as a top risk concern, next to sales and legislation, in their Business Energy Index 2011. Only 66 percent said they had a strategy to manage it.’