Don’t Let Utilities Eat Your Accountants

Mckay Luu | April 7, 2022

Accountants create value. They’re money managing superheroes. Individually, they analyze expenditures and maintain your business’s institutional compliance. As a part of a whole, the financial reports and future-earnings analyses they create are the foundation of business intelligence. Essentially, they fuel growth. But many, many commercial enterprises, from retail chains to hospitals and hotels, inadvertently bog down this crucial arm of their business. The utility bills need to be paid, and the accounting department ends up being asked to make it so.

The justification? Death, taxes, and indirect costs are inevitable.

See, direct costs are a lot more pleasant to plan and deal with than indirect costs. For one, they often translate 1-1 into profit and growth. And two, they’re THE area to tackle for any business intelligence analyst or growth-savvy administrator. Selling high, buying low, and building efficiencies into your offering is the day-to-day stuff of doing business.

Indirect costs, like utilities, are on the other end of that spectrum. On the front end. They’re an overhead expense that you cannot do without. And finding the data you need to build efficiencies, shift employee practices, and retrofit equipment to achieve cost savings is hell and a half.

The result? For the vast majority of U.S. commercial enterprises, utilities get put on the “handle-it” backburner. Accounting gets handed the dubious task of chasing utility bills. Late fees and the occasional loss of service are accepted as normal costs of doing business, and worst of all, one or more of your accountants ends up juggling the rote dragon that is your utilities management instead of creating actual value for your business.

There’s a lot of opportunity under your floorboards

Brass tacks. The average cost of utilities for commercial buildings is $2.10 per square foot. And with the average size of new commercial buildings across industries having increased by almost a third since the 2000s kicked off, that makes utilities—as a principal cost of doing business—second only to rent in fixed overhead. Retail buildings alone have grown to be more than 20 thousand square feet on average.

And that’s just the cost of cooling air, lighting bulbs, and flushing toilets. The other cost of utilities (and the cost this article is principally interested in exploring and solving) is the human cost of hiring and paying a professional to ingest those utility bills, audit them for accuracy, and negotiate with providers.

That expense? Nationally, the average cost of hiring a dedicated utilities accountant is $67,926. And if you’re like many institutions and foist the responsibility of managing your utilities onto a general accountant, you’re probably paying more than $74,000 dollars. Which, as is the case with so many business expenses, is a double-edged sword. It’s an expense you have to pay, but there’s also the opportunity cost of asking an accounting professional to spend their time reconciling utility bills and not doing…literally, all of the other things accountants can do for your business.

Handing off the basic work and freeing your accountant

Setting aside the opportunity cost of inculcating your poor accountant with utility billing, what is the immediate and material ROI for transitioning from an in-house utility billing strategy to a third-party full-time utility services provider?

  • Your accountant, to whom you probably pay a baseline salary of at least 60K, needs to spend anywhere from 2-15 minutes per bill: paying them on time and chasing down issues as they arise.
  • Many of our (Conservice’s) smaller clients have in excess of 1,000 bills each month to handle, which means it takes a full-time accountant all of their professional hours to manage their business’s utility bills.
  • The flat fee that utility management services charge for the same service is well, well below half of what you’re likely paying your full-time accountant to tackle.

TLDR; You could save more than $50,000 dollars a year in pure effort allocation by transitioning from an in-house accountant to a utility management service—and that’s not even incorporating the cost savings of avoiding late fees, the elimination of provider errors, or the opportunities to identify and execute cost-saving retrofits in your commercial properties.

It’s also not factoring in the intrinsic value of a full-time professional set loose on higher-order goals and tasks that actually drive business growth.

Free your accountant and reap the rewards of their expert attention

Your accountants get to fall in love with their job again. The indirect costs of your utility management will go down dramatically. The actual costs of your bills will lower, and your staff will have the time and direction they need to create actual value for your business instead of treading the endless waters of utility bills.

Partner with Conservice utility management, and give your accountants back to your business.

Mckay Luu

Mckay Luu

McKay is the Digital Marketing Manager at Conservice who likes to play tennis, pickleball, and spend time with his family.

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