Bill validation, what is it?

What is invoice/bill validation?

Mistakes happen – it is just a fact of life.

This also holds true in the business world. Companies will spend millions on advanced software systems, data analytics, and top-tier employees – but mistakes will still happen.

In the energy business when mistakes are made it can sometimes lead to the incurred costs being passed on to the customer. Bill validation is a practice that helps mitigate against this.

Bill validation is the robust process of reviewing and highlighting any discrepancies to be acted upon and fixed. Usually, this will involve cross-checking charges received against any amounts paid or received. At this point, the practice has been developed to be automated somewhat but most often will involve some manual validation.

What causes inaccurate billing?

Inaccurate billing can arise from a multitude of sources – so there is no ‘quick-fix’ to avoiding this issue.

If you or your business have recently switched energy supplier then there is a slight chance that data has been input wrong at some stage. This can be as small a mistake as mistyping a single character in the wrong section. Because most people don’t often check their account details with their energy supplier, these mistakes often fly under the radar unnoticed for a long time and can lead to inaccurate invoicing.

Depending on the meter-type installed at your premises, it is likely that your bills could be less accurate than they could be. If you do not own or have a smart meter installed, then you will likely still be providing monthly meter readings to your supplier. These meters are liable to produce readings far less accurate than their more modern, smarter counterparts.

Over the last twenty years or so, the UK energy industry has undergone huge changes – deregulation, household names going bust, and huge takeovers. This has created a situation where some suppliers have reached such a scale that they operate several billing departments independent of one another, some operate with archaic computer systems that are incompatible with other departments, and overall chaos.

Some small business owners may not actually be aware of their eligibility for a reduction in their VAT rates. This leads to businesses shelling out more of their cash on energy than they really need to be. It also points to a large problem with the energy industry – many customers aren’t aware of how much they should be paying in the first place!

The ‘Fantastic Five’ of invoice validation

For those who are now worried that they are overpaying on their energy bills and want to do something about it – this next section is for you. It is easy to get lost in all of the industry jargon, buzzwords, rates, fees, and overall complexity of your energy invoice. Some may be wondering where to even begin.

Don’t panic quite just yet – just focus on these five areas.

What to checkDescription
Contract RatesDig out your copy of your contract – and look for the rate per unit of energy that you agreed to pay. This is the most important place to start.
Meter ChargesSometimes you may be charged a fee for the meter you have installed. Often, this catches customers off-guard.
Standing ChargesStanding charges are fixed daily charges simply for using that energy supplier.
Consumption DataThis will vary dependent on what type of customer you are, as-well as what meter type you have installed. Try to find as much information as you can on how much energy you have used.
VAT RateVAT is a governmental tax that you are required to pay. It is worth double-checking the amount you are being charged as not all customers are required to pay the same amount.

Business invoice validation – where to begin?

So far, we have addressed issues with invoicing generally, without spending too much time focussing on any specific customer-type. Now, we turn our attention to business energy customers, and how they can become budding invoice-validators

This is a simple (and very general) four-step guide for business owners who would like to take a more critical look over their energy invoices, but aren’t sure where to begin:

  1. Use the ‘Fantastic Five’ to find the figures needed to attempt to calculate your expected monthly bill. If you do this correctly, you will find the correct amount you should be billed for that month. If your calculations don’t match with you monthly bill – then it looks like you could be being overcharged. Remember to double and even triple-check your calculations, mistakes happen to everyone – not just energy suppliers!
  2. Utilise your supply chain department (if your business has one) to ensure accuracy of charge allocation.
  3. Narrow your focus onto specific errors – highlight these and attempt to find why the error happened. Worst case scenario is wasted time, but best-case scenario is catching an easily fixable mistake and acting upon it so that it never happens again!
  4. Begin the process of reclaiming this amount from your supplier if you have already paid, or contact them with your evidence to show incorrect billing.

That is all well and good, but why do no businesses actually ever do this in the real world?

Because more often than not – they are too busy trying to keep the business running!

With energy invoicing – it’s something that will only ever happen once a month. In order to reach the level of competency to be able to spot mistakes within energy invoices will require a massive time investment. Most businesses are not able to provide the training, find the money, or a suitable individual to ever make this practice commonplace.

This is a shame as so many businesses will be overpaying for energy without ever realising. It is calculated that up to 35% of invoices from energy suppliers are incorrect throughout the year… that works out as three months of bills overpaid for.

Is there anyone to help?

Yes, there is! Luckily there are dozens of businesses who are willing and able to help you.

There are many choices when it comes to invoice validation specialists, and this is not just limited to energy companies. When looking for a company to outsource your bill validation to – it is important to do your research first. Many companies will promise the world but fail to deliver.

Looking for previous customer reviews or case studies is a good starting point. This should provide some sort of insight to whether they regularly achieve you the ‘guaranteed 15% savings!’ plastered on company advertising.

How to find out who is the best-placed to help

It is incredibly important that whoever you choose to partner with has a wealth of experience in your industry. This leads to a higher likelihood of catching any mistakes, and reaching a favourable conclusion.

So, when looking for somebody to help validate your energy bills there really is only one choice –energybrokers.co.uk.

Energy Solutions have been in the energy procurement business for over 20 years – so know invoicing like the back of their hands. Being in the business for so long has led to the development of outstanding relations with all of their partners – which includes big names like EDF, SSE, E.ON, and Gazprom.

Energy Solutions do not overpromise, and typically recover 5% of utility bill value for their customers. Their highly trained staff can operate either on a fixed-fee or on a no-win, no-fee basis. This means that if no savings are to be found, then you don’t have to pay for the service!

So, if you are interested in saving cash on your energy bill – give us a call today.

Common Questions

What is Bill Validation?

Bill validation is a general term for the process of checking invoices for mistakes in an attempt to save money.

How do I validate my own bills?

It is difficult to do this by yourself and it will take time – it is advised to outsource this process to a company that offers it as a service.

Who does bill validation?

There are dozens to choose from! Some offer it as an integrated service alongside other products, so have a google to find out.

How to choose company for bill validation?

Make sure to focus on things like customer reviews and industry experience, as these will give a more accurate portrayal of the company and likelihood of success.

Why is my energy bill wrong?

It is always more likely that your calculations are wrong and not those of your energy supplier – so double check your working! Energy suppliers do get it wrong sometimes, and this can be for a multitude of reasons. This can include recent changes in address or details, administrative or user errors, or a software malfunction

Who do I contact if my energy bill is wrong?

If you think your energy bill is incorrect – then contact your supplier as soon as possible to try and sort the issue and save some cash!

For more information about this post and how Energy Solutions can help with your Electricity, Gas, or Water, click on the links, or check out the contact details at the bottom of the page.