Reading Your Business Energy Bills
Making sense of the information included in your gas and electricity bills may be difficult, especially if you’re unfamiliar with the terminology. However, it is critical to understand your account to ensure that you are not paying any more than is necessary and determine when to switch to a new plan.
Business Energy Bills – the difference between bills incurred by individuals vs businesses
For domestic and non-domestic customers alike, there are significant variations in price and contract terms, as well as in the way your company is billed, even though the electricity that flows through your home’s plug sockets is identical.
A set price per kilowatt-hour is the most common charge for domestic consumers. However, commercial clients are likely to get a more extensive breakdown of costs, albeit this may be presented in various ways by various providers.
Invoices are not the same, and each energy provider is likely to have a different style and use different wording on the bills they send to you. No matter who your energy provider is, here is a helpful brief rundown of some of the most typical charges you’ll see on your business’s gas and electric bills.
What kind of information is shown on your business energy bills?
According to the energy regulator Ofgem, energy companies must make their invoices easy to understand and engage. However, the quantity of information given on your statement may vary depending upon the source, but you should anticipate discovering the following items as an absolute minimum:
- Your tariff’s official name.
- Tariffs at a lower cost
- How much energy you’ve expended thus far.
- The exact terms and conditions of your contract, such as the termination date and any exit costs, are provided.
- The contact information for your provider.
In addition to these fundamentals, your provider may additionally offer the following options:
- Customer reference number – A one-of-a-kind number given by your provider to identify you. If you need to call your provider, you’ll need to provide this information so that they can locate your account promptly.
- The date on which the provider sends you a bill is referred to as the bill date.
- Billing period – The period that your bill is valid for. It should begin the day after your last charge is paid and should not extend more than a year in length.
- Last payment – This serves as a reminder of how much you paid on your most recent invoice. If you see a significant rise in your bill that seasonal variations cannot explain, it may be an indication that your tariff has expired, and it is time to shop around for a new deal.
- The cost of the energy you have used before the VAT tax is applied is referred to like the bill cost before VAT.
- The amount of VAT tax that has been added to the cost of your energy is referred to as the amount of VAT tax added.
- Total amount to be paid – This is the total amount you must pay, including VAT tax.
The Meter Point Administration Number (MPAN) is a unique number that identifies the energy meter in your home. It may be seen on your bill. Make sure you don’t mix it up with your customer reference number.
Your gas meter’s Meter Point Reference Number (MPRN) is a unique number that can only be obtained by scanning the meter’s serial number. Keep this number separate from your client reference number once again.
Breakdown of energy use:
You’ll get a detailed breakdown of everything you’re paying for here. Using this information, you will determine if your supplier is computing the amount of your bill using an actual figure or an estimated reading.
What is the formula for calculating your business energy bills?
The price you pay for your energy is determined by the quantity of natural gas and electricity your home uses. Energy providers calculate this in various methods. Energy suppliers may estimate your consumption based on your prior bills, but this is not always correct. It might result in you being over or undercharged for your energy usage.
Your energy provider should charge you based on actual meter readings since this will allow them to see precisely how much gas and electricity you have used. If you don’t have a meter reading taken, the provider may send someone to your house, or you can take the reading yourself and send the information online or over the phone to them.
Taking this step will ensure that your gas bill and electricity statement is accurate each month or quarter and that you are being charged the correct amount each month or quarter, because the quantity of energy you consume varies according to the season, you will often overpay in the summer and underpay in the winter, depending on your use.
Nonetheless, since this isn’t an exact science, it’s a good idea to communicate with your energy provider every three months or so to keep them up to speed with your meter readings. Suppose your service provider does not have this information. In that case, they will estimate your consumption based on the national average – this will result in a charge that is unlikely to be remarkably accurate in most cases. If you work from home, it may be worthwhile to investigate if you can save money by signing up for a business energy contract.
Because of the way these contracts are structured, corporations often benefit from lower rates than individuals do. You may even be able to have your VAT lowered to the residential rate of 5 per cent if you use less than 33kWh of electricity or 145kWh of gas each day, depending on your circumstances.
To qualify for a commercial energy tariff, you must be able to demonstrate that you are running a business from your residence and that at least 50% of the energy you use is used for business purposes. You can read more about understanding your energy bill here.
Other useful links about Business Energy
Business Energy Guide For Businesses
The Climate Change Levy
Commercial Energy Suppliers
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