{"id":1552,"date":"2014-04-23T16:32:25","date_gmt":"2014-04-23T16:32:25","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=1552"},"modified":"2022-05-12T10:06:55","modified_gmt":"2022-05-12T10:06:55","slug":"finding-opportunities-in-the-utility-invoice-process","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2014\/04\/finding-opportunities-in-the-utility-invoice-process\/","title":{"rendered":"Finding Opportunities in the Utility Invoice Process"},"content":{"rendered":"

Energy costs are one of the largest expense categories a company has, which makes it a priority to understand and manage utility-related data.\u00a0 <\/span>Yes, if the lights were out last month at one of your company locations, you probably need to pay the electric bill; however, the process of managing utility payments is more complicated than simply keying in the invoice total.\u00a0\u00a0 <\/span>With multiple locations, there are ongoing issues with opening and closing accounts and tracking related deposits and refunds, issues with ensuring that proper rate schedules are applied, and, finally, issues with bill processing and the analysis of expenses to identify inefficiencies across your portfolio.<\/span><\/p>\n

As part of a redesign of their Purchase-to-Pay<\/a> process, a Peeriosity member used iPollingTM<\/sup> to quickly get responses for how companies process utility payments.\u00a0 <\/span>The first question asked, \u201cHow does your company primarily pay for utility (electric, natural gas, etc.) invoices?\u201d\u00a0 <\/span>While in 63% of the cases processing takes place internally in Accounts Payable<\/a>, in 37% of the companies a third-party firm is involved.\u00a0 <\/span>Here are the details:<\/span><\/p>\n

\u00a0<\/span>\"\"<\/p>\n

The second iPolling question asked about the timing of payments to the utility vendor.\u00a0 <\/span>\u00a0<\/span>The results were mixed across all categories, with 70% paying in 15 days or less.\u00a0 <\/span><\/span><\/p>\n

\"\"<\/p>\n

The iPolling questions on the topic of Utility Invoice Payments generated a lot of discussions, with many companies providing additional comments about their process, and with some providing details for the vendor they are using to perform utility audits.\u00a0 <\/span>Here are some of the comments:<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>The payment terms are different by market. Most utility vendors are on immediate terms, but, for the majority of markets in Europe, they are on direct debit and charge the company bank account directly and invoices are accounted for and cleared on the direct debit date in the system. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We use a third-party firm (ECOVA). <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>The utility invoices for two of our business lines currently go through a third-party vendor, and we’re in the process of adding our third business line to that provider. We currently process and pay those invoices in our AP department. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We currently pay utility invoices in-house but are looking at outsourcing to a third party for audit and bill pay<\/a>. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Payment terms vary from immediate to 30 days. We monitor all utility vendor accounts to ensure timely receipt and payment of invoices. Utility invoices receive prioritized processing from a dedicated resource. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>All utility companies are paid in the next payment run after being posted, usually less than 10 days. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We use a combination, with some invoices going directly to a third-party firm for audit, and they instruct us to pay, with other invoices being processed entirely by our own Accounts Payable Department<\/a>. It depends on the country. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>The invoices go directly to a third party for audit and data collection and they provide an electronic invoice file for payment. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Our payment terms are set to immediately pay for utilities. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Amesco is our third party who audits the utility invoice and then instructs us to pay.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>The payment terms are different by market. Most utility vendors are on immediate terms, but, for the majority of markets in Europe, they are on direct debit and charge the company bank account directly (incl. down payments) and invoices are accounted for and cleared on the direct debit date in the system.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>NISC receives reviews and provides a payment file for utilities.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We have utility bills to be paid in 3 days. We had to map these vendors and prioritize invoices from them. With some, we managed to get an EDI connection, which helps a lot.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We pay the utility invoices out of our AP system, and then send a copy of the invoice to our third party for audit.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>The company that pays our utilities (CASS) is on net-zero terms.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We have a third party that captures most of our utility invoices (for usage\/tracking purposes – no auditing) and then transmits them to us via EDI for processing.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We have a ‘hybrid’ in North America where a third party manages the relationships, approves bills, and then sends them to AP to disburse the funds. In the other regions, it is typically handled directly by AP and not managed by a third-party firm.<\/span><\/em><\/p>\n

What process do you follow at your company for utility invoices?\u00a0 <\/span>If you are processing in-house, does your process include auditing invoices, in addition to scheduling them for payment?<\/span><\/p>\n

Who are your<\/em><\/span> peers and how are you collaborating with them?<\/span><\/p>\n

\n

\u00a0<\/span><\/p>\n<\/div>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/span><\/sup>\u201ciPollingTM<\/sup>\u201d is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. <\/span>Using Peeriosity\u2019s integrated email system, Peer MailTM<\/sup>, members can easily communicate at any time with others who participate in iPolling. <\/span><\/p>\n

\u00a0<\/span><\/p>\n

\n

Peeriosity members are invited to log into <\/span>www.peeriosity.com<\/span><\/a> to join the discussion and connect with Peers.\u00a0\u00a0 <\/span>Membership is for practitioners only, with no consultants or vendors permitted.\u00a0 <\/span>To learn more about Peeriosity, <\/span>click here<\/span><\/a>.<\/span><\/p>\n<\/div>\n

<\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":"

Energy costs are one of the largest expense categories a company has, which makes it a priority to understand and manage utility-related data.\u00a0 Yes, if the lights were out last month at one of your company locations, you probably need to pay the electric bill; however, the process of managing utility payments is more complicated […]<\/p>\n

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