Property Manager’s Guide to an Accurate Utility Bill Audit
Are there dollars hiding in your utility bills? Based on the sheer number of utility bill audits done each year, we’d have to say yes – and here’s why.
Each month, your utility bill arrives with the same set of numbers. Some are dollar calculations and some are usage measurement. If you’re like most property managers and owners, it’s business as usual – you look at what’s owed, execute the invoicing, and make the payments.
However, this data could be your property trying to tell you something. And a consistent utility bill audit process helps you organize and leverage the data from your utility bills – it’s an essential part of utility expense management.
It also helps you prevent costly mistakes and catch errors, often resulting in dollars missed or problems averted.
Utility Bill Audit Process and Categories
Let’s start with a solid understanding – what exactly is a utility bill audit?
A utility bill audit is a review of a property’s utility invoices where every line item is examined to identify potential irregularities.
By performing regular utility bill audits, property managers and owners can be empowered with knowing where their costs are, be more transparent with their residents, save money (for everyone), and mitigate the risk of large maintenance issues.
The main example of utility bill audits proving their value is with unexpected spikes in utilities – usually related to the season. For example, you wouldn’t expect a higher gas bill in the middle of summer, or a higher water and sewer bill in the middle of a northern winter.
Performing the Audit: Making Sense of the Data
Now that we’ve covered what to look for, it’s time to start looking for it.
The first step of a utility bill audit is to understand these basic mechanics throughout the year. Outline the main categories on your bill and then note the expected patterns for each – how each is affected by the season, as previously mentioned.
Look at the cost and usage data with a historical perspective. Ask yourself:
- Do these numbers make sense for the season?
- How does it compare with historical values? What were these numbers this time last year? (year-over-year/YoY)
- Are tenants paying too much or too little based on the source of increased usage?
- Are tenants getting billed fairly according to their household size and square footage?
- Is our approach as profitable as it could be?
- Do we want to include or exclude CAM charges?
- Were there utility price increases or regulatory or tax changes?
This takes expertise and can take significant time from an already busy schedule, so it makes sense for many properties to outsource utility bill audits. Not only does outsourcing save you time and money, but it’s more effective.
Having performed thousands on utility bill audits, our team are experts in utility bill audits and know exactly what to look for.
Where many experienced property managers and owners may not have the time or background to analyze the data that could be telling them something, we drill down into the numbers to ensure insights are uncovered.
At Liss Technologies Group, we also provides value beyond the utility bill audit. We can mail bills on your behalf that include detailed breakdowns of tenants’ bills. These breakdowns lead to fewer questions and greater trust.
And with our level of detail in the audits, your invoicing is precise as you know exactly which units are using what. That means no more flat fees with 5-person units paying the same as 1-person units. This drives a fair and profitable billing relationship between property and resident.