The BiU Guide:

Revenue Recovery

A health check for your utility billing

Introduction to revenue recovery

Revenue recovery is a way to take control of utility spending and potentially recoup significant sums of money for your business. Many UK businesses, across a wide range of different sectors, have recovered thousands of pounds, and at times millions, through this process.

Here’s how it works and how it could help your business.

Our 3-minute explainer…

What is revenue recovery?

Most UK businesses have been affected by inaccurate billing for utilities at some point.

Revenue recovery involves undergoing a thorough audit of all your utility spending in the past six years (the maximum statutory time frame recovery investigations can go back to) and identifying where you have been overcharged, then taking steps to recover the money from your suppliers.

It usually also involves taking steps to avoid the same problems arising in future.

Utilities covered by revenue recovery

Electricity

Your electricity costs are calculated using over 30 different sources of data, which means it’s easy for suppliers to make mistakes but not so easy for your finance team to spot them.

In fact, it’s not uncommon for even relatively simple problems such as inaccurately estimated meter readings to go unnoticed. A good revenue recovery specialist will look at all the data related to your billing and metering.

Gas

Although regulator Ofgem is working hard to simplify billing and provide more information to consumers, gas supply is an area where mistakes and overcharging frequently happen.

The complexity of the gas supply market means that a business could be placed on the wrong tariff or even charged for the wrong meter without anyone noticing.

The revenue recovery process involves doing a thorough data analysis of your bills and investigating any inconsistencies.

Water

There are dozens of ways in which a business could be overcharged for water, from having the wrong meter to being charged for a leak that is actually the supplier’s responsibility.

A revenue recovery specialist will audit all of the hidden elements that make up your final water bill.

Telecoms

Telecoms is perhaps the most difficult utility to get a handle on, because of its evolving nature. The technology available is constantly improving, and usage patterns have changed drastically in recent months. Can any business honestly say that it has an accurate and up-to-date picture of its telecoms spend? Or that it’s definitely spending its budget on the right solutions?

A telecoms revenue recovery team will investigate whether your business has paid too much in the past and help you move towards the right solution for your probable future needs. That’s not as easy as it sounds; switching to a newer solution at the wrong point in your contract could mean incurring unnecessary cessation penalties.

Is it worth hiring a revenue recovery company?

For a UK business to experience no problems at all with inaccurate billing is the exception, not the rule. So it’s highly likely that your business could reclaim at least some of its spending through revenue recovery. The law in England and Wales allows you up to six years to recover money that’s been wrongly paid out to a utilities supplier, so a revenue recovery specialist should be looking back over the past six years of billing and contract information.

The larger and more complex your business is, the more glitches and inaccuracies the revenue recovery team are likely to find and the bigger the sums involved are likely to be.

BiU’s revenue recovery team has recovered over £45 million in lost revenue for our customers in just ten years (over £1.7 million in electricity costs for one customer alone).

If you’re sceptical and concerned about costs, choose a revenue recovery specialist that operates on a “finder’s fee” model, like BiU, where there is zero upfront cost. That way, you will only pay out if you find that you’re due a refund from somewhere.

Organisations in almost every sector can and do benefit from revenue recovery

Financial services

NHS & Health Care

Manufacturing

Utilities

Hospitality

Real Estate

Construction

Retail

Technology

Research and Development

Leisure

Education

Public Sector

Government

Supermarkets & Stores

Farming & Agriculture

BiU’s revenue recovery team has recovered over £45 million in lost revenue for our customers in just ten years (over £1.7 million in electricity costs for one customer alone).

When it’s your business that made the error

Sometimes the revenue recovery process can recover wrongly paid money even when, on paper, it looks as if it’s your business that made the mistake. Of course, it depends on what the error is, but one common scenario is that a business cancels a service but fails to explicitly ask the supplier to cancel every element of the service.

For example, you might close down a site and ask the supplier to remove the phone lines, assuming they will understand this means the entire telecoms service.

But the revenue recovery team might find that they continued charging you for the switchboard and equipment rental. Although they have obeyed your request to the letter, a revenue recovery specialist can look at your cease request and find possible ways to negotiate a refund.

This is often successful, but even if it’s not, at least they have made your business aware that it’s been losing money, so it doesn’t continue in the future.

Revenue recovery: how to get started

Engage with a good revenue recovery specialist, and like us, they will just need…

A letter of authority that authorises them to do this work on behalf of your organisation

Access to as much billing information as possible from the past six years – which BiU can obtain on your behalf.

Beyond revenue recovery

The revenue recovery process involves a forensic look at your company’s spending on utilities over the past six years. As we’ve already explained, it’s statistically likely that this will result in the discovery of historical overcharging, which means a refund due to your company.

But aside from any money recouped, there is another significant business advantage to the process: information. The revenue recovery team will have mapped out your company’s utility spending, giving you a detailed idea of what’s being paid for right now. They can advise you on the right contracts for your current situation, streamlining all your utility spending.

Some companies then choose to hire a revenue recovery specialist on a retainer basis so that they can keep everything in order. Others are happy to take the money they’ve recouped and forget about the whole thing for a few more years. We would advise to have a bureau service to keep the billing in tip top health after a revenue recovery has completed, but it’s the choice of the individual business of course.

A revenue recovery audit allows you to see your state of affairs for all of your utilities to set your organisation up for future revenue success. Afterall…

“you can’t manage what you can’t measure”

Peter Drucker

Revenue Recovery FAQs

Some of the common questions answered around revenue recovery audits…

1. If the revenue recovery company finds evidence of overcharging, do we have to contact our suppliers?

No. There’s no work required on your part. Provided that you have authorised the spealist to do this, the law allows the revenue recovery company to challenge suppliers on your behalf and do the work of claiming back your hard-earned money.

2. Our company is currently negotiating a merger. Should we hold off on going through revenue recovery until the merger is complete?

The run-up to a merger or takeover is an excellent time to “clean house”, identifying ongoing sources of unnecessary revenue loss and rectifying past mistakes. So it is a very good time to go through the revenue recovery process.

3. If my business gets a significant refund through revenue recovery, will we have to pay tax on the money?

The short answer is no. Although a refund from a supplier can be a welcome and unexpected boost to the finances of the business, it represents the return of money you’ve already (wrongly) paid, rather than new income. You will of course have to include it in your accounts, but there’s no need to pay tax on it.

Revenue Recovery and COVID-19

Many businesses have been too busy coping with the effects of the pandemic to think about their utility contracts, but now is the ideal time to get a revenue recovery specialist to evaluate your spending.

You should consider revenue recovery if:

  • You had to shut any premises during lockdown;
  • You’re planning to close down any offices or retail spaces permanently;
  • You’re supporting staff with the tech they need to work from home;
  • The focus of your business has changed (for example, selling more online and less in-store);
  • You’re making redundancies or cutting costs in other ways.

Supplier contracts arranged before COVID changed everything are unlikely to be the best fit for your current needs, even if they were perfect before. A revenue recovery specialist will help you find the best deal for your new normal.

Revenue recovery pocket guide

Energy revenue recovery guide

Our pocket guide outlines the BiU revenue recovery service, case examples and gives you a bite-size introduction to next steps. Request your copy today by entering your details below.




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