Business energy contracts shouldn’t take up too much time, but they also shouldn’t be signed and forgotten about it. Here are the things in need of monitoring.
For most entrepreneurs, agreeing utilities deals like business energy contracts is a necessary part of the day-to-day running of the business – but it’s not the exciting part.
Growing the business, expanding into new markets, developing and testing new products and services – all of this can seem much more glamourous, and the energy bills are something to be signed every so often and forgotten about.
While certainly it is true that the best business energy contracts mean the services run silently in the background, there are certain aspects of a contract that need ongoing monitoring. Take bills for example – which need paying monthly. While a company might have a direct debit set up, it is beneficial to keep an eye on what comes out of the business account each month.
Monitoring doesn’t mean obsessing over the bill every month, it means having an idea of what’s going on, getting a handle on the basics and knowing when it’s time to step in. Here are the things business leaders need to know about contracts.
1. Know what has been agreed to
A business must know what it has agreed to in the first place. It is possible to agree to a new contract verbally, over the phone. The call is recorded, and you don’t need to sign anything for the contract to be binding.
If you receive a phone call from a provider asking if you want to agree to a new contract, don’t feel you have to decide on the spot. Do some research first and decide whether they are offering you the best deal available – you can always call back later.
2. Keep tabs on when the contract is up for renewal
A supplier should send a letter reminding a customer that the end of a contract is approaching and providing a window to switch providers.
If a customer misses this window, they will be rolled over – and not necessarily on the same deal as before. This is why it’s worthwhile taking note of when a contract is due to end, so you can be sure of not missing a window.
3. What are you paying?
It’s worth keeping tabs on your energy spend month-by-month so a business knows when bills are likely to be higher – allowing it to budget for it accordingly in cash flow forecasts.
A company can also decide whether it would be likely to benefit from a fixed or variable tariff – with variable tariffs, if the price of energy goes up or down that is reflected in bills. It’s a bit of a gamble. Fixed tariffs won’t benefit from cheaper energy costs, but a business can budget with certainty for the duration of the contract.
4. Do the research
As with anything, it pays to do the research. It’s possible to find business energy contracts that vary in length from one to four years or more. And, while a company can rest easy after the best deal has been sought for this duration, when the switching window rolls around it will need to go back to square one.
It’s important to be careful with price comparison sites as they don’t include all suppliers and available tariffs. Researching the good old-fashioned way and make some calls always pays off.
To request a quote from a supplier a business will need a few things to hand: an electricity supply number and/or gas meter point reference number, which can be found on an invoice. These should be kept with the with the dates of a contract duration, so a company is ready when it’s time to take the plunge.