A little more than twenty years ago, only 9 percent of firms had a Chief Financial Officer (CFO). Fast forward two decades and the CFO is now critical to an organization’s finance functions and is a crucial partner to the Chief Executive Officer.
Over a similar period, process automation has become an essential part of modern business. If the current growth rate continues, nearly every company will be using automation in some form within the next five years. The data produced by automated processes is ripe for analysis and plays to the finance team’s traditional strengths.
Today’s Financial Officer is vital to driving operating improvements and the delivery of the corporate strategy. As such, it’s not surprising that 20 percent of businesses already look to the CFO to lead the analytics function. However, in many cases, they are responsible for the leadership of up to five non-finance areas.
The CFO is ideal for ensuring tools and knowledge are in place to meet desired outcomes. But as the role takes on additional responsibility, they may need outside help. Support will likely come from multi-departmental tools that increase visibility and widen their reach. Bid’s Utility Bill Management (UBM) solution is one such tool.
What is Utility Bill Management?
Inefficiency costs money and can be the reason why businesses fail. In any company, there is room to improve efficiency. PWC estimates organizations can reduce costs by up to 46 percent through automation and process improvement.
Collecting, validating, and paying utility bills is a time-consuming and nuanced task. It is riddled with errors and inefficiency. It’s a process that becomes more burdensome as the business grows—the more sites in which an organization operates, the more complex and strained the process becomes.
Utility Bill Management uses automation to streamline all, or parts of, those processes. By staying on top of the collection, validation, and payment of those bills, organizations can save money by eliminating errors, taking advantage of discounts, and avoiding penalties. The speed at which data is made available for decision-making means the business has the opportunity to optimize its energy costs.
Changing the perspective on energy costs
Energy costs are the perfect starting point for analysts. They are often allowed to slide under the radar—after all, they are just part of the cost of doing business, right? That’s where many companies are wrong. Within those costs, there is significant potential for utility bill savings. Treating the opportunity to reduce energy spend as an asset can lead to significant savings and, in turn, an increased profit margin.
In the case of utility bills, there is plenty of low-hanging fruit to take advantage of. In our experience, the complexity of the billing process means one-in-ten utility bills received by an organization contain an error. Apply that to multiple sites over several months, and it’s fair to assume the business is paying large amounts of money to suppliers unnecessarily.
Tools like Utility Bill Management solutions automatically solve that problem by validating bills against contracts and other pre-determined criteria. What’s more, the data they generate is accurate and in the correct format for analysis. That’s important; history is littered with examples of misunderstandings. Confusion over whether a measurement was in ‘Roman’ miles or ‘Arabic’ miles is thought to be why Columbus ended up in America rather than India. Tools like Utility Bill Management confine those mistakes to the past.
Once the utility data is validated, which happens quickly in an automated solution, the data becomes a single source of truth for four departments—energy, finance, facility management, and operations. It enables teams to benchmark the performance at similar sites, identify anomalies, and forecast future performance accurately. It can even generate reports automatically.
UBM brings needed transparency to data and process
A Deloitte survey claims 42 percent of organizations have their analytics under central control. The remainder are likely to suffer from issues relating to consistency, access, and transparency. Common symptoms include duplicated effort, data that is not shared, and multiple truth sources.
Only through a centralized approach can organizations obtain true transparency over their data and its performance. It’s the only foolproof way to benchmark sites and understand why one uses twice as much energy as another.
Transparency also gives the CFO confidence over the numbers. End-of-period reconciliations are far easier to run and more accurate when there are no manual processes involved. A worried CFO can also see the progress the team is making towards corporate-wide sustainability goals.
Utility Bill Management in Action
One of Bid’s customers, The Salvation Army—an Australian church and charity—recognized the opportunity that lay hidden within its energy spend. The organization operated from two sites—in Sydney and Melbourne—and each had different approaches to accounting and payments. Their utility bills were being paid locally rather than centrally, and at that point, it cost $35 to process each invoice manually.
By centralizing and automating invoice processing, the Salvation Army made savings that went straight to its bottom line. Utility Bill Management also showed the organization that there had been little scrutiny over bill payments, and they had missed many opportunities to negotiate prices. A subsequent tariff review saved the Salvation Army $40,000.
Hear more about how utility bill management helped Salvation Army’s bottom line. Watch the customer testimonial.