Cal Wilson / March 18, 2022

To some degree, almost every business relies on utilities. It’s an operational expense necessary to running a safe and functional physical location.  

However, it’s also an expense that many business owners and operators don’t feel they have a lot of say over. From understanding usage and rates, to billing errors, to proper budgeting and planning, there is a lot a business can do to have greater understanding and agency in their spending.   

What are common billing errors found on utility bills?  

Unfortunately, there are a lot of potential errors that could be leading to you overspending. The errors we will be looking at include: 

• Incorrect classification 
• Physical issues with your meters 
• Meter reading problems 
• Paying for the wrong meter 
• Confused rates  
• Meter multiplier issues 
• Incorrect late fees 
• Incorrect taxes 

Are you being classified correctly? 

A provider’s rates aren’t usually uniform across all kinds of customers. Usually, they’re divided between residential, commercial, and industrial. Among these classifications, there are also specialty rates for different kinds of customers, such as the elderly or different kind of economic development projects.  

You don’t want to be a business paying residential rates, and you don’t want to be missing any special rates discounts you might be eligible for. Paying for your correct billing classification is important.  

Meter issues can cost you.  

You don’t want to pay the price of your meter not reading your usage correctly.  

This happens when meters experience installation errors, communication failures, damage, and so on. It’s very rare that meters are inspected regularly to prevent these kinds of errors or misreading. While a meter breaking isn’t super common, make sure you ask your utility provider to check up on your meter once in a while, especially if you feel something might be off.  

Likewise, there can be meter reading issues that transmit the incorrect data from your location to the provider. If it’s a small error, the company might not notice, but your wallet will. If there is a discrepancy, look back and see if there was a spike in your consumption or if your bill is an inaccurate representation of what you used. 

Essentially, being vigilant, reading over your own bills, and not relying on the meter to be infallible is important.  

Don’t pay for someone else’s meter. 

This is a particular issue for multi-location businesses. If you only have one facility, you only need to keep track of one meter. However, it becomes harder to keep meters straight the more locations and meters there are.  

Unfortunately, businesses can end up footing the bill for an external location’s meter. This is an incredibly costly billing error, and one you’ll want to keep a close eye on to avoid if your business expands.  

Are you being charged the right rates at the right time? 

Rate changes can vary a lot, from time of day to time of year. While power meters are generally reliable, as mentioned before, they can make mistakes. It’s possible for you to be charged the wrong rate for the time of day in which you’re using your utilities.  

Closely monitoring your bills or using a real time data-analytics solution to track your usage will allow you to better understand your consumption and ensuring your invoice matches.  

Keep an eye on meter multipliers.  

New Brunswick Power explains, “[t]he actual voltage/current used is often too large to be registered by your meter. The meter’s registering capacity may only represent a small percentage of your actual load.” 

Because of this, utilities use meter multipliers to invoice you more accurately. 

“The meter multiplier is similar to a map scale in that it relates to the meter’s scaled down reading of the actual consumption.”  

Sometimes, a faulty formula or mistake with a new meter can lead to an incorrect number or misplaced decimal. This could cost you a lot.  

These billing errors are more common in smaller municipalities and providers. Larger providers often use automated systems with less room for error.  

Incorrect late fees applied? 

These are as simple as they sound. Sometimes a late fee will show up on your invoice incorrectly. This can be at a substantial cost to you, unless you call your utility company to get it sorted out. 

Don’t pay for the wrong taxes.  

Some businesses will apply for different tax rates than others when it comes to utilities. Regional policies and incentives can be applied to save your business considerably, but you need to know what you should be paying and be able to/hire someone to advocate for yourself.  

In conclusion… 

These are just some of the possible billing errors that may be found on your utility invoices. The best thing your business can do to avoid them – and to recover any money lost to them – is be vigilant, know what you should be paying, and work with professionals who have the time and expertise you might not have.  

Cal Wilson / March 18, 2022

Depending on what industry you work in, your waste removal expenses are potentially a significant burden on your bottom line. Sure, you can reduce waste — but compromising the quality of this service isn’t really an option. Finding savings is possible, but first you must understand what goes into the cost.

Waste cost categories.

It may be hard to imagine the price breakdown of waste removal, when most of the process happens away from your facility.

Your bill is most likely composed of four main cost types:

• Container costs
• Collection costs
• Transfer costs
• Landfill costs

Understanding your options among these four categories can go a long way in helping you reduce your bill.

Container costs.

Containers are the aspect of waste removal that you’re probably most familiar with, and an area where you have a fair amount of control. Commercial waste containers come in an array of sizes and are typically available for purchase or rent.

Pricing is based on the cubic yard sizing of a container. On average, a 4yd³ container costs $15 a month to rent, and $350 to purchase outright. Prices increase incrementally as size increases.

Knowing what size you need might come with trial and error. Come collection time, the optimized container is the one that is filled, but not to the brim or overflowing. Excess waste is often subject to excess fees.

Come collection time, the optimized container is the one that is filled, but not to the brim or overflowing. Excess waste is often subject to excess fees.

Renting vs. Purchasing.

Whether renting or purchasing is more effective for you is going to depend on what you need. Depending on your line of work, a permanent container might not make sense. For example, temporary construction or landscaping projects are more likely to require a rental, compared to a residential building or school.

Expert Market advises that purchasing a container is more efficient if that bin will be in use for at least 23 months.

Collection costs.

Waste collection fees are going to be the most variant depending on your location, container size, and collection frequency. This could be as little as $30 a week, or as high as $3,000. Figuring out your needs can include some trial and error and industry research. A restaurant is likely to require more frequent collection than an office building.

The kind of waste your business generates, as well as local health codes and in-person traffic throughout your premises, is going to determine your collection frequency.

Transfer costs.

Factored into your waste removal fees are the fuel and other transportation costs of moving your waste to a landfill.

Transfer can be arranged in two ways, direct or indirect:

• Direct transfer transports the waste from your premises to a landfill in a single trip.
• Indirect transfer transports waste from your premises to a transfer station, where it’s stored and batched before being shipped to a landfill site.
• Because transfer stations aren’t free to use, indirect transfer is the more expensive option.

Based on your premises’ location, your transfer method may be out of your control. Businesses located far from landfill sites must rely on transfer stations to dispose of waste, which inevitably increases costs.

Many waste management providers have discounted rates with transfer stations and commercial landfills that are worth investigating.

Landfill costs.

Every time waste is disposed of at a landfill a landfill tipping fee is charged. On average, for commercial landfills, these range from $25-150 per ton.

As with transfer costs, many commercial waste management providers have preferential rates for customers at landfills.

The hidden costs of commercial waste removal.

Even when you’ve accounted for the four main cost categories of your waste removal bill, you may notice that there are some extra, unexpected charges on your bill. Keep these potential fees in mind when budgeting:

• Dismount and push charges, which apply per bin when drivers have to get out of their vehicle and push your containers to an unobstructed spot for emptying.
• Key charges, which apply per bin when drivers require a key to open a locked container.
• Enclosure charges, which apply per bin when drivers must remove bins from a fenced enclosure and then replace them when emptied.
• Gate service charges, which apply per bin when drivers must open a closed or locked gate.
• Long walk charges, which apply per bin when your containers are placed in such a way that the drivers have to walk over a specific distance — such as ten feet — to access them.
• Regulatory charges, which are depending on region, and cover the cost of providers complying with environmental regulations.

One way to avoid many of these charges is to evaluate the container situation on your premises and see if you can optimize the location to make it easier for haulers to collect your waste.

Reduce waste expenses.

This information might seem overwhelming. Waste expenses can really add up. Fortunately, there are steps you can take to optimize your services and reduce your expenses.

Start by considering an internal or external audit of your waste removal system. Are your] bins being emptied too often, or not often enough? Could you be paying transport fees for a closer station or landfill? Are your prices increasing multiple times a year? Are your containers the right size for your waste output?

Ask yourself these questions and pay close attention to your waste removal bills. You might be spending more than you need to.

Cal Wilson / March 18, 2022

If you accept any kind of credit card payment, you may have heard of surcharging. It’s the practice of adding an additional charge to a customer’s purchase to cover the fees a payment processor requires for processing credit cards.

While it may seem like a win for you, the merchant, it’s not a completely problem-free practice.

In this article, we take a look at this practice. Should your business consider it? What are the pros and cons?

Why do some merchants surcharge?

Every time a customer swipes their Visa, Mastercard, American Express, or other kind of credit card, you incur a processing fee. These are called interchange fees. According to Quickbooks, the following variables impact a merchant’s interchange fees:

• The credit card company
• The type of card being used – i.e., whether it’s a rewards card, a business card, etc.
• How the transaction is processed – POS, over the phone, or online.
• The price of the product or service.
• The type of business of the merchant.
• Whether the transaction is domestic or international.

Likewise, rates change twice a year, in April and October.

Interchange fees are just one of the many fees merchants are charged to be able to accept credit card payments.

How does surcharging work?

Without surcharging, that fee lies squarely on the merchant.

If you’re looking to pass that expense onto the customer, you have two kinds of surcharging options; brand or product surcharging. Brand surcharging adds a charge every time a customer uses a card from a specific credit card provider; some merchants may add a surcharge, for example, on Visa purchases, but not Discover purchases. Surcharging on the product level, however, only adds surcharges on certain types of cards under a specific brand. Merchants may choose one option, but not both.

Surcharging is subject to different laws in different regions.

As you can imagine, in order to protect the consumer, surcharging is heavily regulated. In some places, it is not legal at all.

In fact, in the United States, surcharging is illegal in Connecticut, Maine, and Massachusetts. In Canada, service fees can only be added on certain kinds of transactions.

For the regions where surcharging is a legal practice, merchant are beholden to a surcharging cap. These vary by area, but often fall around 4%. The caps are put in place to prevent merchants from making profit from surcharges.

No matter where you are, if you surcharge, your business is subject to rules of disclosure. Merchants must disclose their intention to surcharge ahead of a transaction, and at multiple touchpoints while a customer is in the store. This includes such notices as a sign notifying the business’ surcharging practice at the store entrance, as well as at the point-of-sale. The surcharge dollar amount should also be clearly visible on the customer’s receipt.

While these practices keep surcharging ethical, they can also be off-putting to some customers, who only see the addition of a fee they might not completely understand.

Does surcharging save your business money?

There is no simple answer to this question. It can, but it depends on your business and your customers.

According to Evolve Payment, “[i]f your industry is a ‘race to the bottom’ where the lowest price wins, then surcharging is likely to hurt more than it helps. This is especially true in B2B industries with corporate contracts.”

For some businesses, adding fees like surcharges is going to be more common practice and expected by the customer. In other industries, it might hurt your chance of making a sale.

Fortunately, there are other strategies.

So your credit card processing fees are eating into your revenue, but you don’t think surcharging is the right move for your business. Not to worry – there are other things you can do to ease the expenses.

For example, instead of surcharging, many businesses offer cash discounting.  In this practice, merchants discount the price of purchase if the customer pays with anything other than a credit card. And, while surcharging isn’t legal continent-wide, cash discounting is.

Cash discounting is only possible if you have a certain amount of wiggle room on your markup pricing. However, when it is an option, it certainly is a bonus for customer experience.

Another tactic is setting a minimum for credit card payments. Depending on your rates, it may not be profitable to offer credit card payments under a certain dollar amount.

Another strategy is working to reduce your overall merchant services spend. Part of this is exploring what options are available to you among multiple vendors, knowing rates are fair, and how to negotiate for the best price. A cost reduction professional who specializes in merchant services might be your best asset if you take this route.

In conclusion…

As Evolve Payment says, “surcharging is, at the end of the day, passing business expenses onto your customers.”

While it has the potential of saving you money on your variable expenses, it’s not always a great strategy optically. Offering cash payment incentives, working to reduce your overall merchant services fees, and ensuring you’re paying the correct rates, are alternative strategies to reduce your spend while keeping customers happy

Cal Wilson / March 18, 2022

When creating a budget for your business, it is helpful to separate and account for fixed versus variable expenses. Mistaking the latter for the former can cost you, and the better you understand all your expenses, the better chance you have of optimizing them.

If you’re unfamiliar with the concept, the best way to describe the difference is that fixed expenses are costs that stay the same from month to month, whereas variable expenses are ever-changing and harder to predict.

Fixed expenses.

Fixed expenses often represent the largest part of your budget. For a business, your fixed expenses are going be costs such as rent payments, insurance premiums, property taxes, and so on. While these are not easy to optimize, they are easy to work into your budget, as they are unchanging and paid at a consistent frequency.

If you can lower these expenses – say, by finding a different insurance plan that works for your needs – you automatically save more money each month or pay period.

In business budgeting, it is important to remember that all your fixed costs must be paid, regardless of your sales that pay cycle. If you’re starting a business, making sure you can cover these expenses for a period before you start bringing in revenue is crucial to staying afloat.

Variable expenses.

Your variable expenses are going to represent the costs incurred by how a given month or pay period goes for your business. How many credit cards you swipe, how much electricity you use, or how much waste you generate; all of these are going to incur a bill that varies every cycle.

Some of these expenses can be harder to reduce than others. How much heating you use to keep your office warm, for example, may be more difficult to lower than the amount of waste your organization is generating. However, in many cases, these expenses are in areas that you can strategize or work with professionals to identify savings, creating a more predictable monthly bill.

Employees can represent either kind of expense.

Depending on how you staff your business, your employees can be either a fixed or variable expense. Anyone hired on full time, who is guaranteed a forty-hour work week, will be a fixed expense, whereas a seasonal or part-time employee will likely be a variable expense, as their hours are subject to change month to month.

Budget with these expenses in mind.

When you’re budgeting, it’s important to separate your fixed costs and your variable costs. If you’re able to determine what you absolutely will be spending in your fixed costs, then it is easier to identify and strategize areas to save with your variable costs.

Month to month, keep track of your variable expenses. Maybe one month you allotted too little to certain expenditures and went over budget. If you keep a closer eye on each cost category, you can do a better job budgeting and planning for the future going forward.

Don’t settle on expenses.

The lower you can keep your costs, fixed or variable, the better the results for your bottom line. If you don’t have experience negotiating rates or deciding what expenses are fair in comparison with the rest of the market, don’t settle. Explore your options, bring in consultants, and work with professionals who can guide you in the right direction.

Especially for the fixed expenses you will be locked into for some time, this could be a make-or-break decision for your business. Why pay more than you have to?

Cal Wilson / March 18, 2022

As businesses are racking up debt and supply chain issues are increasing material expenses, cutting costs is more important than ever. With many businesses offering online shopping as an alternative to in-store, you might find your payment processing environment has changed or become more expensive.  

If this sounds like your business, here are five tips for reducing your credit card processing fees, and making the most of your revenue.  

1. Keep an eye on your rates.

Complete monthly audits of your merchant services statements to check for billing errors and avoid rate creep. Processors usually offer seemingly standard contracts, but many contain provisions that allow them to increase your rates. This often comes with the caveat they must notify you first — but those notifications could appear in small print on one of your statements. Be sure to read your statements for notification of rate increases and periodically check your rate to see if it has mysteriously increased. Often, all it takes for them to waive the rate increase is a phone call to object. 

2. Swipe cards and answer questions.

Credit card fees are primarily based on risk. This means you’re better off swiping or inserting a card than entering the number manually. Whenever a number is entered by hand, your processor considers it a higher risk transaction and may charge a higher fee. However, not all organizations have the resources to physically swipe or insert a card. If you’re inputting the card number manually, answer as many of the processor’s questions as possible. Providing information such as the customer’s zip code, debit vs. credit, and the three-digit or four-digit code on the back of the card are all designed to lower the risk of fraud. By entering as much information as possible and lowering the risk, you’ll see reduced transaction fees! 

3. Use an address verification service.

An address verification service (AVS), is a solution that verifies the cardholder’s billing address with the card issuer. It takes your payment services a step further in preventing fraud and has been a big benefit in the world of e-commerce, including limiting chargebacks. 

It works when during the checkout process, the customer enters their address, which is compared to the address on file with the issuing bank. Once the comparison is made, the issuing bank sends an AVS code to the merchant, who can then use the code to authorize or reject the transaction. 

Many major card issuers, including VISA and MasterCard, support AVS. 

4. Make sure PCI Compliance is up-to-date. 

A vendor will incur monthly fees from the Payment Card Industry (PCI) if its compliance questionnaire is not completed annually. These fees will continue to build up indefinitely until compliance forms are completed. The online questionnaire usually takes less than 30 minutes and saves hundreds of dollars every year. By completing the questionnaire, you assure your credit card processor that you are taking the proper steps to keep customer information safe and minimize the risk of fraud. 

5. Hire a professional.

An independent merchant services consultant will find you the lowest rates possible in your area, and can also track your rates going forward to make sure you’re never paying more than you should. For example, Schooley Mitchell looks out for your best interests by providing objective advice to reduce your electronic payment processing spend and improve service. 

Systematic analysis and auditing will: 

• Uncover and eliminate hidden fees 
• Identify and recover overcharges and billing errors 
• Select and apply appropriate rate categories 
• Ensure government legislation is properly applied 

In conclusion… 

Now is not the time for your business to be spending more than it needs to on credit card processing fees. In reducing costs and growing your bottom line, we hope these tips will be of aid to you.