News

The current cost of living crisis having a significant impact on both households and businesses with the energy price increasing being of particular concern. In this post we will discuss the easy and simple ways to deal with the energy price increases.

Current Causes of Price Increases

The increase of energy prices has been caused by a number of global factors that have had a knock on affect such as:

• Unusually cold weather in Europe has increased the demand for heating during the winter months.
• Heatwaves throughout Europe, China and Japan have increased the demand for air conditioning during the summer months.
• The war in Ukraine has placed a limit on Russian gas exports through sanctions combined with the Russian government refusing to supply countries that have sided with Ukraine.

Analyse Your Costs

Yes, we are accountants and therefore we naturally are always keeping an eye on our costs and expenses but it’s important to understand where the money is going.

Although it may seem daunting, once you have a better idea of where the business is spending money, it is possible to find areas where costs can be cut. For example is it possible to move to a cheaper supplier, do you have too much stock in storage or are you paying for subscriptions that are no longer useful?

Keep reading for some top tips from an accountant on how to be savvy and protect your business, your employees and yourself during the current cost of living crisis.

Conduct a Regular Energy Audit

An energy audit is used to determine a residential or commercial building’s energy efficiency^[1].

A certified energy auditor will investigate the building to calculate its energy usage, they then produce a report detailing all the appliances and their energy usage and even provide you with recommendations on reducing your energy usage.

Although small businesses are not required by law to conduct an energy audit, it is recommended as it can provide you with key insights on how to save energy and money^[2].

Install Smart Meters

One of the wonders of modern technology is that it removes the guess work from estimating your energy bills. Energy bills are well known for taking a stab in the dark and guessing your energy usage. This is now a thing of the past with smart meters sending accurate readings of your exact energy usage to your energy supplie.

Smart meters also provide an easy to understand built in display which can help you keep track of your readings, monitor your energy usage and control your spending^[3].

Change to Energy Efficient Lightbulbs

Replacing outdated incandescent lightbulbs with modern LEDs is a simple and relatively cost effective way of reducing your energy usage and carbon footprint. LED lightbulbs use over 75% less energy than their incandescent counterparts which can have a significant impact on your energy bills. Even better is that LED bulbs have an average lifespan of 15 years, meaning this is a small investment that could save you lots of money in the long run^[4].

Turn Your Heating Down

It may sound ridiculous but simply turning your heating down can decrease your energy bills as well as having a positive effect on the environment. According to The Energy Saving Trust, you could be adding an extra 10% to your heating bill for every degree you increase your temperature; so why not dig out those jumpers and save yourself some money.

Turn Your Computers Off

The Energy Saving Trust asserts that the average UK household wastes £86 a year simply by leaving appliances on standby. Although this statistic is for households, it’s easy to understand that this could be a significant area for savings for businesses.

The easiest way to ensure all possible devices are off is to assign someone to check appliances at the end of each working day, this is particularly important if your offices are closed over the weekend or during holiday periods.

Utilise Eco-Mode Settings

Most modern appliances will have an eco-mode setting which is designed to reduce the energy usage and the overall carbon footprint of the appliance.

Eco mode is easy to activate and most of the time only requires the touch of a button so why not consider what appliances you use the most and try utilising the eco-setting as it will help to reduce your energy usage and costs in the long run as well as improving your carbon footprint^[5].

Ditch and Switch to a New Energy Supplier

Although running a business can be stressful and time consuming, it’s important to carve out some time to look for cheaper bills and better deals as an estimated 1.3million businesses are missing out on cheaper energy bills simply because they are not looking for them. Repeat after me; if your energy bills are too high you have the right to ditch and switch to a new energy supplier.

There are a large number of comparison sites that make this job easier. It’s important to take the time to grow through the different deals and make sure you really are getting the most bang for your buck. It is also easier than ever to switch to anew supplier and ditching and switching is proven to be the fastest way to save yourself money on your energy bills.

Minimise Heat Loss

With the current energy price crisis, we all want to get the benefits of the energy we are actually paying for. This is why it’s important to minimise the amount of heat that is being lost through the building. This can be done by investing in insulation or upgrading to double or triple glazed windows. However, the easiest way to prevent heat loss is to identify and secure draft areas, closing the curtains at night and ensuring that doors are closed in order to trap heat where it is needed^[6].

Stagger Employee Working Hours

Running a hybrid model of staff working both from the office or from home or having staff stagger their working hours can help to reduce energy usage and overall energy bills. Flexible and hybrid hours have been linked to increased employee motivation as they can choose their working environment and has become increasingly popular since the Coronavirus pandemic.

Increase Your Prices

Although everyone s struggling to pay their bills and most businesses won’t want to increase their prices, it’s an option that should be considered in order to offset the impact of the energy crisis.

Not only will raising your prices help to mitigate the damage of the current economic climate but it will also help your business survive and therefore keep your employees in a job; which they will thank you for.

Price rises should always be considered before redundancies and although my not be a popular choice, they can be reversed once the current crisis is over.

Although the current crisis can seem scary and overwhelming, it’s important to remember that it will pass and inflation will calm down soon.

How RAM Accountants Can Help You

RAM Accountants is a boutique accountancy firm in East Kilbride with over 25years’ experience working with and on behalf of our clients to provide the bestaccountancy solutions. Our high levels of service and individual approach havesecured us a retention rate of over 90% and our strong client relationshipsallows them to focus on building their business.

Contact us for more information on how we can help you and your business.