3 Keys to Cost-Effective Utility Budgeting

With good management, utilities are the main line items you can have an impact on to create savings for your operating budget. But simply going off the information in your paper bills is not enough. Your bills will not tell you when and what caused peak charges or if your consumption to demand ratio is normal for your building.

Bills typically arrive weeks after the billing period has closed which makes calculating accurate monthly accruals challenging. This can lead to high variances between your budget and your actuals that are often hard to explain.

To manage utilities properly there are three keys that every property management team should have.

Understand Your Load Shapes

Getting control of your utility spend starts with the ability to see your building’s load shape with real time data. Visualizing the energy consumed allows you to pinpoint problems and identify the days on which you are over-utilizing your budget — rather than getting surprised by your bill and high variances later on. The load shape will identify when you hit your peak demand to get smarter around demand heavy activities like building start ups. Load shapes bring to life the activity in your building that a bill simply cannot show.

Use a Smart Blended Rate

The tariff schedule that dictates your utility charges each month can be difficult to understand. It varies per season and often requires looking up information on the utility company’s website to get a full breakdown. Using a smart blended rate from your most recent bill that divides consumption by total cost gives an accurate estimate of utility spend from your real-time consumption. This allows you to know where you stand at any point in the month without having to find a detailed breakdown of charges.

Accurately Predict Spend

For most teams, budget reporting happens in the middle of the month before the accounting books close. To create an accurate accrued expense submission, you need to factor in historical usage along with weather and occupancy for the month. Not factoring in all of those things will lead to headaches in the future for you and your accounting team.

With Aquicore’s Utility Budgets Module you get all the tools necessary like the projected utility spend algorithm and smart blended rates that update monthly to analyze the breakdown of your costs to deeper understand where you are spending the most and what opportunities there are to save. High performing property management teams reduce utility expense month over month with Aquicore.