What is Energy Insider?

Listen to the Intro Here

Episode 1: What is Utility Bill Management?

Welcome to Vervantis’s podcast series. And in this episode, we’re going to be talking about utility bill processing, management, and payment, which is very topical for a lot of companies who are currently looking at outsourcing strategies to streamline some of their processes and help them find cost savings. So today, I’m joined by Ashley Gill from our solutions team, who’s kindly agreed to join us and share the discussion. As Ashley’s involved with energy consumers every day, she’s promised to make sure we answer the questions you’re keen to ask us; because you know what I’m bound to forget. So welcome, Ashley.

What is utility bill management? I don’t think a lot of people know that this is a service.

So, utility bill management is for most organizations that have larger portfolios. They are well used to receiving, processing, validating, and paying bills, and utility bills can be an absolute bind for them. So, if you’re a small mom-and-pop shop, and you’ve got, you know, one or two locations, you’re likely you’re going to have 2, 3, or 4 utility accounts for each premise. So really, it’s not a big issue to be managing, you know, four or eight utility bills a month. But if you have 1000 locations, as a lot of our customers do, then all of a sudden, that’s a much bigger problem, because you will literally have 4000 – 5000 invoices flowing in every month, and that can overwhelm an AP team. So, you’ll have all those invoices coming in, the AP team has to make sure that payments they make are legitimate, they have to do their checks and balances, and they do what they can to validate the invoices. They’ll be looking for any obvious shocks in cost., but it becomes tricky for them when you have that volume. Especially when they’re doing a race against time to get them paid because most utilities will only give about 15 days to pay an invoice. So, it’s super important that they get through that process, and it’s not cheap for a company to deliver that. So that’s in a nutshell, what utility bill management is; it’s the outsourcing of that very time-consuming, administrative heavy process of paying utility bills.

But isn’t this all just a core function of having a company, or what benefit is there to outsource it?

Oh, that’s true. I mean, account payable core function is to the business, but I think organizations are recognizing that in order to very quickly process and validate utility bills correctly, they need a deeper set of tools and knowledge to do that effectively. Because it’s just too much information, and it will slow the organization down. If they try and do a better job of that, then they’re having to employ more people to turn the handle on doing that. It’s can get very, very expensive. Then, of course, they’re finding that it’s not actually going to be delivering the results that they need in terms of all the reporting. So, you’re right. It is a core function. But I think, as I’ve said before, companies are really looking deep within themselves to find these opportunities to find cost savings and streamline the way that they’re doing things.

So, what does Vervantis’ utility bill management process look like?

If you’re a large company, you’re going to be receiving all these invoices that can be coming in from all these different utility vendors. Let’s just put this in perspective. Across the US, you have over three and a half thousand electric companies for example. They are going to have their different billing formats that are going to be making their way into you. That’s a lot to process. So, what we do is we will immediately contact all of your utility companies, and we will get them to divert those utility bills from you to our central processing location. When those utility invoices arrive, they will be scanned, keyed, validated, and then a funding file created. That’s actually custom-built to map straight into whatever your accounts payable software is so that you have some time to review it and then fund a central disbursement account from where the utilities are securely funded. So, it really does streamline it down, and as you notice from that walkthrough there’s a validation process, which goes on as well. That process typically is a 48-hour process. So, it really does speed things up.

How long does onboarding a client take?

Onboarding will vary depending on the client size, makeup, quality of data, and so on. But I would say if you want a good rule of thumb about 45 to 60 days, some can be fast-tracked and get on a little bit quicker. Others may take a little longer. It just depends, as I’ve said, on the number of accounts that we’re having to take on and validate and clean all the data and get them moving.

I can’t understate the value of that data cleansing process at onboarding. It’s the old adage; if you put rubbish in, you’re going to get, you know, you’re going to get trash out the other end. So it’s really important to make sure the data is of good quality. I’ll give you a good example of that we, we’ve actually onboarded a customer before who had, you know, many thousands of accounts, and in that onboarding process, we identified over 130 accounts, which they were paying bills on, but shouldn’t have been. There was a disconnect between the real estate team and the facilities team, which hadn’t been picked up. So they were still paying utility bills for accounts for properties that they hadn’t actually been in for a while. That’s immediate, kind of right off the bottom line, it’s just adding value from day one. So, it’s a really important part of the process to get right.

These companies are trusting us with their money. What assurances do they have that their funds are protected with us?

We go the extra mile, we think, in trying to give those assurances. Vervantis is a SOC 2 Type II certified organization. What that means is that our policies and our processes are independently tested to make sure that they are robust, and it means that we also have regular third-party penetration testing of our systems and software to make sure they are secure. So that’s kind of the first part of this process of security.

I think the other part is that when customers are funding those accounts, that central disbursement account is actually never in our control; it’s not in our hands. So we can’t access funds that customers deposit. The only way those funds can move from that disbursement account is actually to the vendor accounts that have been pre-prescribed. So, it’s a very secure process.

Are there any other protections we offer?

We, as an organization, put a lot of thought into how we can give those assurances and give customers confidence in our process. Aside from the fact that we’re SOC 2 Type II, with a track record of looking after tens of thousands of utility accounts, and about a one and a half billion dollar spend for our clients currently. So, we are a larger organization, but we underpin that with some significant insurance, not just business insurance, but even go further with things like cyber insurance. A really high level of cyber insurance, which helps to give customers that those protections, if things were too, for any reason go wrong.

Are there any guarantees since we’re handling these invoices? How do they know that if we mess up, they are still protected?

If we drop the ball on processing an invoice, then naturally, we hold our hands up, and we take the full kind of hit for that. We will provide financial compensation. We have a late fee guarantee that will do that and provide that. We do work diligently to make sure that we’re not dropping the ball in our process. More importantly, that the ball isn’t getting dropped on just the day-to-day operation of receiving an invoice. For example, we will consider an invoice missing if it hasn’t arrived at a set number of days prior to the normal due date. That’s when it comes missing in our world, and we’ll be chasing that down to make sure that you know there aren’t any late fees in the first place

Along with the other parts of the process, what visibility do our clients get to us handling all these things for them?

Vervantis has spent a lot of time, and continues to invest a lot of time and money, in our systems. We have our own proprietary software, which allows customers a good level of visibility into their entire program. Actually, not just utility bill management, but it will allow them to see, you know, every invoice, not just the PDF, but all the line-item data. We’re actually one of the few services that gather 100% of the line-item data off the invoice, which allows not just really good quality reporting data. It allows us to really go in a deeper dive to find things like overspends. To find those areas where you’re trying to find those energy hogs or outliers in the portfolio.

If a company puts in a request for an open-close, can they see the steps of the process they’re on that?

They can. When there are new accounts that need to be set up or accounts that need to be closed for different locations, there is that miserable task of trying to get through to a utility company they’re on hold, often for, you know, hours trying to get through and get this dealt with. In our system, the software itself, you can just click on really easily make the request. The entire process is mapped through the system. So you’ve got complete visibility of the request that’s made to open or close, what status it’s in, and what’s been done. We even track all the email correspondence is actually tracked in the system as it relates to what’s going on with a particular site. So you can really quickly come in, and you can search by site number, and you can actually find all that information instantly. So it’s really, really powerful.

With all these moving parts, though, it sounds like it would be easy for things to get lost and then result in a disconnection. So how often does that happen in our process?

Disconnections are incredibly rare. I won’t say that they don’t happen. They’re incredibly rare. And in fact, you know, in the, you know, the five or so years that we’ve been operating, we’ve only ever had, I think it’s two disconnections. Actually, that’s not because of our process falling down. It’s because they were accounts that were never notified by the client that they were part of their sites. So we didn’t even know they existed until they were actually having that disconnection situation. But again, our team is very adept at working with, you know, emergency situations. We were able to work very quickly with utilities, get power restored, get the account set up correctly, and mapping it through the billing system. Not only was that dealt with really quickly, but it was back on and billing properly. We’d mapped it through to make sure it never happened.

Again, you kind of touched on this already. But how much contact do our clients have with their utility providers?

We never exclude our customers from talking to their utility companies or any vendor companies, suppliers. We think it’s really important that they have the ability to have those relationships and have that contact when needed. I think a lot there’s an awful lot of value with the utility companies can bring to customers, so that’s the first thing. When it comes to managing the utility bill processing and management, the whole rationale is that our teams will manage most of that activity. The idea being that our customers really are going to be managing by exception. So we are very, very hands-on. We’re the experts at the elbow. We are the first port of call for everything. We will manage everything directly that we can, about 95% of exceptions, on your behalf. So you really only have to get involved if you have to get involved and I think that works quite well. There’s a good balance there.

So what would you say are the top five benefits of our process?

I think for our customers, they certainly see that the top five are having some good assurance. So it’s knowing that their utility bills have had the attention to detail through a good validation process, that they’re having those overspend, highlighted, and addressed. Finding where they’ve got outliers in their portfolio. Making sure their invoices are paid on time is obviously really, really important. So I think the number one thing is really an assurance that they’ve got a trusted partner looking after things and making sure that things are kind of happening as they should.

I think the second thing is that they recognize how much of their valuable resources can be freed up so that they can focus on higher priority projects. I think that’s really important. Having people in your organization, it’s quite costly by the time you factor it all through. So if you can take them off mindless, administrative, low-value tasks like this and put them on high-value projects, that’s definitely an area where customers are benefiting.

The third thing is that they do get much greater visibility of their costs, their use, the trends. That flows from having good high-quality data on their spends and it really does help. It will support other things as well, like energy procurement programs or sustainability reporting. Once you’ve got that really good quality data flowing, there’s an awful lot that you can do with it.

The fourth thing is, is that they enjoy fewer are late fees. Anyone out there with large portfolios knows how quickly that they can add up. You know, if you take too long to evaluate an invoice, then they’re going to throw on a late fee. We’re very good at avoiding those late fees and actually arguing when to have them removed at times when they have been applied. That’s important. So making sure we have fewer late fees and fewer supply disruptions is obviously really important. That’s a good value that they see.

And I guess, by far from last, but one of the fifth main points is really that they have a much more streamlined funding process. Instead of having hundreds or 1000s of payments being made, those are condensed to just a few secure transactions. We create funding files as the customers need them, which can be every day. Most of our clients will say, Okay, we have a Monday, Wednesday, Friday funding arrangement, and that tends to work well. They certainly appreciate the fact they do not have to write, you know, hundreds or 1000s of checks out to all these different companies and try and get the payments there on time.

All right. Well, if a company is interested in looking at this solution more, how can they get ahold of us?

I think the first thing they should do is to, obviously, drop us a line. If they can provide us with a bit more information about the number of utility accounts that they have to manage that will really help us.

They can drop some information at info@vervantis.com. Or they can call our toll-free number, which is 1-888-988-5474.

Then we’ll be able to get them much more information and schedule some time to give a demonstration of the system and really show them firsthand how it will streamline things for them.

Well, I hope, I hope that’s given you a bit of an insight into answering the question of what is utility bill management and that we have given you a very high level of some of the value adds that come from the process. If you do have more questions, you’ve got those contact details there, you can reach out to us, and we’ll gladly answer your questions as they arise. So yeah, thank you again for joining me. And, again, if you found this information useful and informative, well join us for our next podcast because we’re going to be covering energy procurement in a bit more detail and how to reduce costs not just from your competitive energy suppliers where you have open direct access markets, but we’re also going to be looking at how you can reduce costs in regulated utility markets, which a lot more people are in those in those areas. So we’ll be covering that, and we look forward to continuing the discussion.