Many of us are swapping central heating for a hot water bottle at the moment as the cost of living and price of energy continues to climb. The crisis doesn’t just apply to life at home though, it’s also affecting businesses across the country who are having to cut back and compromise in order to meet the demands of hefty energy bills.
These aren’t just shocking statistics in a news headline. These numbers could be the difference between a business surviving or shutting down during the coming year. It also means some businesses are finding it hard to secure energy suppliers over concerns about bankruptcy or inability to cover their costs.
It’s a desperate situation, so in this article we look at what options might be available, and share some practical advice if your business is struggling to pay its energy bills.
Don’t suffer in silence
Financial worries of any sort are crippling and at the moment it seems like every newspaper wants to talk about them. If your ability to earn an income involves being able to put the lights on when it’s dark, the energy costs faced by your business mean much more than a snappy headline.
You’re not alone in this. Though the level and sort of support they can offer might vary, start with the people around you.
Friends and family
OK, they might not produce a bag of cash, but the sheer stress of running a business takes its toll on all of us.
Tell it like it really is, and reach out the to the people who love and care about you. This is the time to accept any emotional support and comfort when you need it most, even if they can’t physically pay the bills for you.
Again, your accountant might not be able to pay the bills for you but what they can do is offer sound and strategic advice to secure your financial situation as much as possible.
Accountants see behind the scenes of lots of businesses, and they’ll have an impartial view of yours. They’ll be able to help you identify opportunities to cut costs or improve cash flow, or simply become more efficient. Your accountant will also be able to help you navigate debt in the most financially-savvy and tax-efficient way possible.
If you don’t have an accountant, take a good hard look at your financial reports – in detail. It’s all too easy to miss things when you’re in a rush.
Your energy supplier(s)
If you can’t pay your bills but the letters just keep coming through the post, you really need to contact your energy supplier(s) and make them aware of your circumstances. Many suppliers will be more than happy to put a payment plan in place—but more on that in just a moment.
Reach out to your energy supplier(s)
As we mentioned above, if your business can’t pay its energy bills, it’s vital that you get in touch with your supplier(s) and let them know about your situation.
The sooner you do this, the sooner you can make the first step towards a solution that (hopefully) suits everybody. Bills aren’t just going to disappear if you keep ignoring them and honesty is always the best policy when you’re looking for support.
How the conversation pans out will depend on your individual circumstances, the supplier, and other variables such as payment history, length of contract, and customer loyalty.
In general, anyone struggling to pay the bills will usually find suppliers are ready with contingencies to help you out and in turn, get their money faster. This help could even be something as simple as installing a smart meter for you, so you are charged on actual usage rather than estimated costs.
Your supplier will likely be able to set up payment plans, or payment breaks to turn your debt into more manageable increments. They may also be able to offer expert advice on things like more affordable tariffs or other ways you could be saving money and using energy more efficiently.
Some energy suppliers also offer schemes or grants designed to boost business energy efficiency to help lower costs. This could be something like subsidising more energy-efficient equipment, for example.
If your supplier(s) aren’t able or willing to help, you could always consider contacting Citizens Advice.
Seek out government support
The government has put in place an Energy Bill Relief Scheme (EBRS) for non-domestic customers, which includes businesses. The scheme provides discounts on energy bills from 1 October 2022 to 31 March 2023, with further support announced until 31st March 2024
This discount is being automatically applied by your supplier, so you don’t need to do anything to claim it. If you don’t think this is happening, you should contact your supplier straight away to get your discounted rates set up.
Outside of the EBRS, it’s also worth checking in with your local council to see what supporting funding and grants are available for small businesses. You will likely need to apply for any provision that is on offer but anything that is designed to help reduce your energy costs is worth investing time in.
There are also various schemes, grants, and initiatives available through charities and other non-profit organisations. Free services like Grants Online are a great place to start.
Shop around for other suppliers
You could also consider shopping around. Compare rates and prices that other suppliers are offering to see if there’s something more suitable out there for your business.
Don’t just get online quotes either. Call up any suppliers you might be interested in moving to and speak to them directly as they may be able to tell you about newcomer promotions or other special deals.
Good bookkeeping habits are crucial when it comes to staying on top of your bills, managing your finances, and protecting your cash flow. Learn more about our cloud-based software and create your account.