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Understanding Your Bills

Updated: Oct 24, 2023

Although business energy bills can be difficult to comprehend, taking the time to understand them can be beneficial. They provide valuable information that can assist you in managing your expenses and identifying strategies to reduce energy usage and save money. Before considering switching energy suppliers, it's important to be aware of the main expenses to look for. This article offers further insight into comprehending your business energy bills.

Calculating your energy bill

Calculating your business energy bills is not as straightforward as just looking at the amount of energy consumed each month. Instead, the total amount you are charged is determined by various factors, including:

Energy usage: The number of kilowatt-hours (kWh) you consume is multiplied by the unit rate you pay based on your current tariff. For instance, if you use 100 kWh of electricity in a month at a unit rate of 4.5p per kWh, your monthly bill will be £45.

Standing charge: This is a fixed daily fee that you pay irrespective of your energy consumption. The standing charge rate is multiplied by the number of days in your billing cycle. For example, if your standing charge is 45p per day and your billing period is a 31-day month, you will pay £13.95 in standing charges.

Taxes and levies: Your bill will also include additional charges such as VAT and the Climate Change Levy.

If you qualify for any discounts, such as the reduced 5% VAT rate, this will be reflected on your bill and deducted from your overall bill amount. Understanding these components can help you compare energy deals and select the best option for your business.

What to look out for on your bill

The structure of your business gas and electricity bills may differ based on your supplier. This variation can create difficulties in locating the relevant information for your business. However, most bills should contain three crucial sections that are important for you to consider.

- The amount of energy consumed, measured in kWh

- A detailed breakdown of the charges incurred

- Information on your contract's end date and the switching window

Below is an example of an energy bill we have provided to break down each section of the bill and help you understand the information provided by your supplier.

1. Account Number – This may appear as an account number or a customer number. This is a unique code that you will need when contacting your supplier.

2. Date of Bill and Bill Period – The date of bill is the date that the current bill was sent out on. The time period of your bill is the range of time your bill that the information refers to.

3. Previous Bill – This section refers to other bills you have received within your bill period. It may include the dates of previous bills you have received along with the balance paid/owed.

4. Breakdown of Current Bill – The breakdown of the bill gives you information on the total cost of your bill and why it amounts to the price shown. This can give you a clear indication of the amount spent on electricity, gas, standing charges and VAT.

5. Total of Your Energy Bill – This is the cost of all the components of your bill. This figure is the amount due for this bill.

6. Your Meter Reads – These readings represent the latest meter readings of your gas and electricity.

7. Contact Information for Your Supplier – Your supplier will provide a contact number if you need any assistance or to answer any queries you may have. It is important to have your account number on hand to help your supplier identify you in this process.

8. About Your Tariff – This section will give you an overview of your current tariff including details such as your end date, tariff type, payment method and annual consumption.

9. Tariff Comparison Rate – The TRC on your bill highlights the cost of your gas and electricity, this can make it easier for you to compare energy prices.

10. Breakdown of your Energy and Gas Tariff – This section refers to a breakdown of both your gas and electricity. This gives the bill payer insight into how their energy is billed based on their readings and how it is worked out by the supplier.

11. Standing Charge Breakdown – This is a breakdown of how the standing charge is calculated. The standing charge on your bill refers to a fixed daily amount you must pay for energy no matter how much you use.

12. Total Charges – Your total charges highlight what you have been charged so far throughout your current bill period. It will provide the total you have been charged including VAT.

13. Meter point reference number (MPRN) and Meter Point Administration Number (MPAN) – These numbers refer to a unique code that identifies your electricity and gas supply points. It is required by law for these to appear on your bill.

What Affects Your Energy Costs?

Business owners should be aware that their energy costs are influenced by various factors such as their location, type of energy source, energy efficiency, seasonal changes, energy consumption, energy market conditions, and government policies. It is important to choose a tariff that works for you and your consumption to ensure you are getting the best deal that suits your business.

If you are looking to change your supplier, look at a new tariff or have any questions regarding energy prices now get in contact with one of our energy specialists today.

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