If you run a business or own a commercial or residential building, you know that electric and gas bills can be confusing. Sometimes, you may get two electric bills, one from your local utility and one from a third-party energy supplier.
Utility bills use complex tariffs and can easily have mistakes. Finding these errors isn’t always easy, which is where a utility bill audit comes in.
A utility bill audit is a service where an energy expert reviews your bills to find errors or discrepancies. This helps ensure you’re only paying for the energy you actually use. This article explains how a utility bill audit can help your business save money.
What is a Utility Bill Audit?
A utility bill audit is a careful review of your energy bills to find and fix mistakes. It checks that your charges match your contracts, verifies meter readings, examines usage patterns, and ensures rates are applied correctly.
Audits can be done in-house or by specialist auditing companies. The goal is to make sure your bills are correct, recover any overpayments, and suggest ways to prevent future errors.
Different Types of Utility Bill Audits
Most utility audits focus on electricity and natural gas bills, but audits can cover many other services, too.
Many auditing companies offer checks for:
When choosing an audit company, pick one experienced in multiple utility types. This increases your chances of finding errors, securing refunds, and making sure all your invoices are accurate.
How Billing Errors Cost Businesses?
Incorrect energy bills happen more often than many realize. Mistakes can occur at any point, from meter reading errors to wrong rates or misinterpreted contracts.
Industry estimates suggest that up to 20% of all business energy bills contain errors. This means many organizations end up paying more than they should.
Common Utility Billing Errors
Many businesses don’t realize their energy bills can contain mistakes. Some typical errors include:
- Wrong tariffs applied: If your supplier uses outdated or incorrect rates, you may pay more than your contract allows.
- Meter reading mistakes: Manual reading errors or problems with automatic meters can cause inaccurate bills.
- Duplicate charges: Businesses with multiple meters or locations sometimes get the same charges on more than one invoice.
- Incorrect contract terms: Suppliers may fail to apply agreed discounts or charge for services not included in your contract.
These errors often go unnoticed, especially in busy finance departments where staff have limited time to check every line item.
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What a Utility Bill Audit Can Do for You?
A utility bill audit can bring many benefits to a business. Beyond recovering money lost to billing errors, it can also uncover opportunities to save on future utility costs. Here are some of the main advantages of conducting a utility bill audit:
Utility Bill Refunds
If a utility audit company identifies errors in your past utility bills, you may be entitled to a refund. Most audit firms will handle the refund process for you, including filing the claim and collecting the money. Refunds can be issued as a check or a credit on your utility bill.
These refunds usually result from common mistakes, such as meter reading errors or billing calculation mistakes. Additionally, some audits uncover cases where organizations are partially or fully exempt from sales tax on utility bills. In such cases, the auditor can file an exemption certificate and claim a sales tax refund from the state on your behalf.
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Rate Schedule Classifications
Another key benefit of a utility audit is reviewing your rate schedule with the utility company. Rate schedules determine how your distribution costs are calculated.
Some utilities offer lower-cost rate options for businesses or buildings that use energy in specific ways. A utility audit ensures your business is on the most cost-effective rate schedule, helping you save money over time.
Ongoing Monitoring
Some utility audit companies provide ongoing bill monitoring to catch errors in real time. This is especially useful for businesses with multiple locations across different utilities.
Continuous monitoring helps you stay organized and can reveal additional savings opportunities, such as switching to a lower-cost energy supplier or spotting unauthorized charges from energy scams.
Signs You Might Need a Utility Bill Audit
You might need an audit if you notice:
- Sudden or unexplained jumps in energy costs.
- Bills are based on estimates rather than actual meter readings.
- Multiple sites, meters, or complicated contracts.
- Upcoming contract renewals or new supplier agreements.
- Changes in operations, like facility expansions or new equipment.
Even if none of these apply, many businesses schedule audits every 12–24 months as a best practice.
The Process of a Utility Bill Audit
A utility bill audit is straightforward, and most auditing companies follow a similar process. Typically, it includes these steps:
1. Authorization & Bill Collection
First, you sign an agreement with the audit company. You give them permission to access your utility data and provide copies of all relevant bills.
2. The Audit
Next, the auditors review your billing data. Once they have all your historical bills, the audit usually takes about 6–8 weeks to complete.
3. Findings
Once the audit is complete, the company will share its results with you. The report shows any errors found, potential refunds, and additional ways to save.
4. Implementation
Finally, you approve the audit company to act on its findings. This may include collecting refunds, adjusting rate schedules, or contacting the state tax office for you.
Who Qualifies for a Utility Bill Audit?
All businesses in the U.S. can benefit from a utility bill audit. Some, however, may gain even more:
- Businesses in states that allow full or partial sales tax exemptions on utilities. Auditors can check if you’ve been overpaying.
- Companies with complex utility bills or multiple locations across different states. Complex billing is more likely to have errors.
In short, if your bills are complicated or you might be eligible for tax exemptions, a utility audit is worth considering.
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Utility Bill Auditing Companies vs Internal Audits: Which Is Better?
You can audit your utility bills yourself, but using a specialist auditing company has some clear advantages:
- Expertise: Professional auditors know the common mistakes and understand complex billing systems.
- Time savings: Manually reviewing large amounts of billing data can take a lot of time, especially if your business has multiple locations.
- Supplier relationships: Established auditing companies often have contacts with utility billing teams, which can make resolving disputes faster and smoother.
For businesses with limited staff or complicated energy needs, outsourcing audits usually delivers faster, more accurate, and more thorough results.
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Conclusion
A utility bill audit is a smart way to ensure your business is not overpaying for energy. It helps uncover billing errors, recover refunds, optimize rate schedules, and even prevent future mistakes. Whether you handle it in-house or work with a specialist auditing company, regular audits can lead to significant cost savings and better financial control.
If your energy bills are complicated, rising unexpectedly, or span multiple locations, scheduling a utility bill audit is a proactive step. Take action today to make sure your business only pays for the energy you actually use and keeps more money in your pocket.