It can be tricky to understand a business energy bill, but you need to check it regularly because they have a lot of  important information that can assist you to manage your business energy costs. Even better, it can help you to find ways to reduce your electricity business consumption and save money. 

Remember that a potential energy supplier’s proposed energy tariff can depend on both the time of use and amount of your energy consumption. Higher consumption can usually mean a lower price. And, a unit rate decrease can be masked by standing charge increase, so you need to consider both charges. This page discusses how a business energy bill is calculated. 

A business energy bill

It’s easy for most business owners to think that their business energy bills are calculated by just looking at the energy usage each month, but there is a lot to it. The amount that the energy supplier bills you each month can depend on several things.

The business energy bill can depend on the amount of energy your business utilizes. Therefore, the energy supplier takes the number of kilowatt-hour of energy the business utilizes and multiplies it by the unit rate that you have to pay on the current energy tariff. For instance, If your business utilizes 50 kWh of electricity in a single month at a unit rate of 5p per kWh, then the energy supplier can charge you £25 for that month’s electricity usage.

The energy supplier also considers the standing charge. This is simply a flat daily energy charge that you have to pay them regardless of the amount of energy your business uses. The energy supplier can multiply this rate by the number of days that are within the billing period. For instance, if the standing charge is 5p per kWh and the billing period has 30 days, then you need to pay £15 in standing charges.

Besides these, there are also taxes and levies that you need to pay. Additional charges, such as the Climate Change Levy and VAT can also be added to your business energy bill. If you are entitled to any discounts like the reduced 5 percent VAT rate, then this can also feature on your business energy bill.  

Key things that can appear on the business energy bill

The format of the business energy bill tends to vary depending on the business energy supplier who provides your business with electricity and gas. As a result, this makes it hard to identify the information that is relevant to you and your business. That said, most business energy bills usually have three key sections.

This includes a breakdown of the amount the energy supplier is charging you, the amount of energy usage, and your energy contract expiry date and the details on the switching window. The amount of money the energy supplier is charging should be your major concern.  

A business energy bill needs to have the billing date, billing number, and VAT number. You can usually find your account number near the top of the energy bill, and your energy supplier uses it to identify you. It’s a good idea to remember this number because you can need it if you decide to contact your business energy supplier. The VAT number refers to the number that the energy supplier keeps for the registered VAT number for your business. If there is something wrong with this number, you have to tell your energy supplier right away to avoid underpaying or overpaying VAT.

Your business energy bill can also have the account number and the contact details of the energy supplier. This is a specific number that the energy supplier uses to identify your business energy account. This section can also have the contact details of your business energy supplier. If you have any complaint for anything with your account, the business energy bill has the contact details. Many business energy suppliers can also put separate contact details, but this depends on the type of query. For instance, if you want to tell your energy supplier that you are relocating your business premises, then there can be a separate contact number.   

There is also contract information on a business energy bill. Your energy supplier can include the contract details. These can be the name of the energy plan your business is on, the renewal date, and a contact number to discuss the energy plan. Keep in mind that the business energy supplier can write to you within a specific period before the expiry of your current business energy contract to tell you that the energy plan is approaching it’s expiry date. 

But it’s also a good idea to take note of this date so that you can have enough time to do an energy price comparison. This is because if you don’t have enough time, your business energy supplier can place you on a rollover energy tariff which is quite expensive.

Your business energy bill can have two types of meter reading. There is an estimated reading that an energy supplier can use if you fail to send them your energy meter reading for a while. Another one is the actual meter reading which is more accurate because it’s based on the recent meter reading. And, if your business has a half-hourly meter or even a smart meter, then your business energy bill can have an accurate meter reading that is automatically transmitted from your meter to the business energy supplier.

You should note that an estimated charge can leave you overpaying or underpaying for the energy your business utilizes. Therefore, you need to send your business energy supplier the actual meter readings regularly, such as at least twice or once every six months, though you can also decide to send them once a month. 

A business energy bill can also have an outstanding balance from a previous bill. This figure shows that there is an outstanding balance, but this can vary depending on the time of the year. For example, if you use a direct debit during the summer months when it’s warmer, the energy consumption level can be lower, so the amount of money you can be paying may not be enough to cover the energy usage in the winter. As a result, you can have a debt with the energy supplier.