We all have to deal with them — at home, work even on holiday. They often keep us in check from month to month. And whether we like it or not they are a vital part of our lives. What is it we hear you say? Budgets.
There is one particular budget that we share the common interest in, and that’s the energy budget. We could choose to ignore it, but we all enjoy the little luxuries in life by saving here and there where we can. Right?
For this time of year it’s great, turn the heating off and see the savings come in thick and fast into our pockets. There’s no real hassle.
But when it’s time to look at the bigger picture, some companies have it down to a T.
Our friends at Schneider Electric boast a forecasting accuracy of 97%, that’s the potential for some huge savings. On a company turning over millions globally, imagine just how much that 3% is worth!
How can they be so accurate? It’s the figure of 8. Eight components that allow them to be accurate, saving efficient and above all else aware of the company’s structure.
Many companies look on in admiration, and it’s not easy. They take a firm grip of all aspects of energy use that has the potential to reduce their savings.
1. Transportation, supplier and third-party charges.
Is that extra order really that urgent or can it wait to be shipped in bulk – not only is it saving on the delivery cost but it cuts down the energy needed to fulfil the order.
2. Energy taxes.
Many companies forget can forget their own tax exemptions, and making sure the key parties are aware, makes for an accurate budget. Tax exemptions may sound like you’re saving money already, but this can easily happen the other way round if you’re not on your game.
3. Regulated network charges.
Distributors will update their customers on changes in policy, but even when this is approved, key personnel are not always kept in the loop. Memo’s may seem dull, but they keep everyone in the know and paves the way for a successful forecast.
4. Correct tariffs and rates.
Energy tariffs and rates are determined by consumption, usage, profile and location. If there is an excessive charge that falls within your contract, question it. But at the same time, be sure to maximise your savings by having a plan of action based on these tariffs.
If a job can wait until morning when rates might be cheaper, it makes sense put it on hold until tomorrow.
5. Energy account/ meter.
Take each of your energy accounts into consideration. Generalising your forecast based on one account could lead to some rather nasty surprises if the rates differ.
6. Cleantech and renewable.
There are plenty of incentives out there for using renewable energy. It’s worth taking the time to study this vast area of the energy industry to see how it can benefit your company. It may well just lower your energy costs.
7. Contract Expirations.
We’re not always lucky enough to have contracts run alongside our company’s fiscal year. But it’s worth taking into consideration what changes may be ahead or required if your energy company is threatening price hikes.
8. Facility and operational changes.
Changes in workload can have a massive bearing on the effectiveness of a budget. Reducing hours, increasing production, and the opening of new sites are the main culprits to factor into a budget.
Now for many, this will seem excessive. But imagine for all the manufacturing costs, shipping costs etc. the money saved on energy can have a significant impact on the yearly finances of a company. Usually, energy spend is the second or third biggest line item in a company’s budget. Yet most energy budgets are way off, causing a budgeting tornado for your organisation.
So next time you’re sat budgeting, imagine the scales involved for the likes of Schneider Electric.
More info available at Schneider-Electric.com