Last week’s UK Energy Savings Week (31 October – 6 November 2016) has made businesses think about making savings on their gas and electricity bills.

For some businesses, even the smaller ones, energy bills can spiral into thousands of pounds each year. Add to that all of the other running costs – such as insurance, IT, security and water usage – and collectively they can make a big dent in profit margins.

Savvy cost management can keep these bills under control but many companies lose sight of this – and the impact of this sinful oversight could prove fatal to their business. Here cost management expert Great Annual Savings Group (GAS) looks at the seven deadly sins that companies must avoid to keep their energy bills in check.

SLOTH
Doing nothing is probably the greatest sin of all. Guilty companies that stick with the same supplier out of misguided loyalty, or because they haven’t got time to shop around for a better deal, generally lose thousands of pounds each year.* Around two-thirds of businesses arrange fixed-term contracts with their supplier of between one and three years, meaning they cannot benefit if prices fall.

Remember: Do your research and look for the best deal.

GREED
The opposite is almost as bad. Some companies assume they can save huge amounts of money by scouring the market without any outside help. But they fail to realise that they don’t have the skill, time or requisite market experience to know where those good deals are hidden. As a result, they secure a deal that they think is good value for money – when there are probably better ones out there.

Remember: Don’t be afraid to ask for help.

GLUTTONY
Even if you’ve managed to secure a good deal, that’s not the end of the process. Energy consumption must be monitored regularly to ensure you’re not paying more for your energy than you should. Buying a smart meter is a good way of doing this. It will allow you to accurately track consumption and give utility firms less leeway to overcharge you. It’s also important to monitor when energy is being used, and in which parts of the business. *Almost one half (46%) of companies’ electricity usage happens outside of traditional business hours. Taking simple steps to address this, such as turning off electrical equipment and lighting at night, can save significant sums of money.

Remember: Monitor your usage to make sure it reflects the amount you’re paying.

WRATH
Adopting a short-term energy strategy is a sure-fire way of paying more than you should for your energy. The companies that save the most money are those that align their energy strategy with their wider business goals. Business owners often experience anger when they sign a one-year deal and come out of that to higher rates that they could have avoided with a longer-term deal.

Remember: Think long term.

PRIDE
Pride encourages some company bosses to do everything in-house, rather than seek external specialist advice. This, however, can be counter-productive when it comes to analysing the energy market. To get the best prices, continual tracking of the price trends is a must but this takes many hours of work – and the money you save may be offset by the money lost in resourcing this time-consuming task.

Remember: Outside help can save you a small fortune and cost you next to nothing.

LUST
In their pursuit of profit, many company owners often overlook the small print. Energy firms sometimes lure customers in with an attractive unit price, but they fail to notice higher standing charges or hidden charges. Some utilities also charge enormous rates as soon as the existing contract expires, so make sure you’re aware of the contract end date and act accordingly in advance.

Remember: Scrutinise the terms and conditions of the contract and don’t agree to any new deal until you know all of the charges involved.

ENVY
Ever wonder why your competitors are paying less for their energy than you are? Don’t get jealous, get savvy. Your competitors probably have a better understanding of the complexity of the market – so take steps to address this. Employ an in-house energy procurement specialist or seek outside assistance.

Remember: You won’t know if you’re getting the best price if you don’t understand the market.

* Source: The British Chambers of Commerce / British Gas Energy Insight Report 2016