If it’s the same as last month it must be right – think again! (To the tune of £210k refunded)

A question for all those responsible for the payment of an organisations energy invoices:

Are you sure that you are only paying for the energy that you consume?

The reason I’m highlighting this is because we recently discovered that a new client of ours had been paying 900% over their actual consumption level for over 6 years on a gas supply! Despite the huge ongoing additional cost that this added to their overheads, the spend had seemingly not been so much as questioned, never mind investigated in that time. A new FD spotted something was wrong and managed to get £80k back themselves, however he recognised that he needed expert help to check if £80k was correct or not and at this stage brought us in, in much the same way that you would bring in a Tax Specialist

As it is the total refund came to over £210,000. This on an energy supply that should – on a competitive tariff at today’s rates – be costing in the region of £7,000 to £8,000 per year (and much less in previous years). A huge additional cost for an SME to bear, particularly in today’s financial climate.

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Embracing Change at Auditel’s 16th National Conference

The most highly attended and successful Auditel National Conference ever, took place at Whittlebury Hall Hotel, near Towcester, on Friday 29^th October in the presence of over 150 Auditel Consultants. Its theme was Embracing Change.

Managing Director Chris Allison reported: “Today, we celebrate another year of growth and success in our network for a seventh year in a row. We are the only knowledge-based business in the franchise industry to achieve this. With this growth, our turnover has grown steadily and increased by over 150% since 2007 and by year-end, we would expect to have over 3,500 clients. The collaborative nature of Auditel has allowed us to make quantum leaps forward and as long as we embrace change with courage, careful planning and action, our futures will be secure.

For the second year in a row, Auditel was shortlisted for the bfa’s Franchisor of the Year awards. Last year, we were one of 8 shortlisted for Franchisor of the Year and this year, one of 6 shortlisted for Best Franchisee Support. Given that there are over 900 franchisors in the UK, we are delighted with these accolades. We are the only white-collar franchise to be nominated for two consecutive years. For the third year in a row, we were finalists in the Franchise Marketing Awards. We came second in the Best Franchisee Marketing Support and 3^rd for the Best Website.”

During the black-tie dinner, a number of awards were presented to those franchisees who had distinguished themselves during 2011. These included ‘Rising Star’ Awards, sponsored by BP&N presented to Mike and Luisa Keig; ‘Newcomer of the Year’ Award, sponsored by Welcome Telecom and presented to Stephen Sowerby; the ‘Tim Rix Memorial Award’, presented to Denis Brennan; the ‘Consultants Consultant Award’, sponsored by Alternative Route Finance and presented to Denis Sprague. The ‘Franchisee of the Year Award’, sponsored by EDF Energy, was presented to David Powell.

Chris Allison summed up the Conference and another momentous year:”Today’s agenda was crafted to provide you with ideas to move your businesses forward next year and inspire you to have the courage to embrace change. I am sure our workshops and key-note speakers will help you in preparing for 2012.”

Auditel Sponsors the Winner of the IoD’s Director of the Year (large company) Award

Michael Portillo, Craig Errington, Edward Brewer, Auditel

On Friday 23^rd September, the IOD’s Director of the Year UK Final Awards Ceremony took place at London’s Lancaster Hotel at a special celebratory lunch. The event is the IoD’s premier event in their calendar and once again attracted an abundance of exciting high-calibre entrants from across the UK.

Auditel, the UK’s favourite Cost and Purchase Management Specialist were delighted to be sponsoring the IoD Director of the Year (large company) Award again this year. They welcome the involvement in raising awareness and celebrating the very best of business leaders in the UK. The award was open to all Directors from FTSE and other large listed companies who have shown excellence in their own region.

At the ceremony, Wesleyan Assurance Society Chief Executive Craig Errington won the Award after securing the West Midlands regional award earlier in the year. He then went on to win the main overall title as 2011 Overall Director of the Year.

Craig said: “This is a tremendous honour and I am delighted to have won. While it is an individual award, directors are only as good as the team and staff around them which is why everyone at Wesleyan can be proud of this accolade.”

Miles Templeman, Director-General of the IoD, added: “I would like to extend my warmest congratulations to Craig. He is an outstanding winner and I wish him and Wesleyan Assurance Society more success over the years to come. He has beaten some incredible competition from across the country to win the ultimate accolade – UK Director of the Year.”

SSE shakes up the UK power market

SSE has announced bold moves to improve the liquidity of the UK power market by auctioning all of its electricity output and purchasing all of its electricity requirements in the day ahead market.

The company is the first of big six to break ranks over the way it manages its electricity trading. Its initiative will begin in earnest on 14 October with the expectation that it will reach 25 per cent during November. The aim is that all of SSE’s electricity supply and demand will be traded in the day ahead market by the end of the current financial year.

SSE argued that this move will significantly improve the liquidity, depth and credibility of the market, and assist in the creation of a robust and tangible pricing index.

SSE is the second largest electricity generator in the UK and last year generated over 47,500GWh of electricity, which represents almost 15 per cent of the UK electricity demand.

Alistair Phillips-Davies, SSE’s generation and supply director, said: “If other energy companies adopt a similar approach, this commitment could lead to a transformation in the wholesale electricity market in Great Britain.
“We believe this commitment represents the most significant change to the GB electricity market since the market arrangements were amended in 2005, to form the current market arrangements known as BETTA.

“Customers have demanded greater transparency around how we operate in the wholesale market. As well as improving liquidity, this approach will also improve the transparency of SSE’s activity in the wholesale market.”
Source: Utility Week

Threat to Big Four highlights value of Auditel’s service

The Big Four Audit firms are potentially under threat from draft EU proposals published this week which will force them to abandon their consultancy businesses and share their audit work with smaller rivals.   Although this is unlikely to affect the majority of SMEs there are some interesting themes emerging which are relevant.

Apparently FTSE100 firms on average change their Auditors once every 48 years (and some multi-nationals have not changed for over a century according to the FT).   The current status quo does not address the threat of familiarity that results from re-appointing the same audit firm for decades and the independent view that is required could easily be compromised by this close relationship.  This has not only stifled competition but has compromised the ‘ethos of scepticism’ of the accounting profession vis-à-vis their clients.

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Energy – A Burning Issue

How Financial Directors can Regain Power Over Rising Energy Costs Impacting Their Organisations’ Profits

Wholesale energy prices have soared in the last six months as high oil prices continue, the Middle East is uncertain and the nuclear disaster in Japan causes concern. The major energy providers have passed these price increases on to their business customers. Many face energy bills which could be 50% higher than they were paying only two years ago.

In June 2011, the FT and The Economist Business Barometer Research found that leaders foresee the biggest risks to their businesses to be rising costs of oil, commodities prices and interest rates. This prompts greater scrutiny of their profit margins and higher expectation for financial directors to perform in challenging times.

In July, after a second major British energy supplier announced double-digit tariff increases, RWE npower reported: ‘Three hundred major and small energy user companies counted energy as a top risk concern, next to sales and legislation, in their Business Energy Index 2011. Only 66 percent said they had a strategy to manage it.’

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Auditel at the Leicester Business Event 2011

On Thursday, 29th September Auditel will be exhibiting at the Leicester Business Event 2011 Auditel consultants Pam Godwin and Mike Ramsden will be on Stand 21 in the Keith Wellar Hall. We will be on hand to give you more information about Auditel and how our cost management service has helped thousands of organisations across the UK to reduce financial waste and improve their profits.

The event is Leicester’s premier business-to-business ~Trade show aimed at small and medium sized businesses. Taking place at the Walkers Stadium, Leicester on September 29, 2011; the show will give visitors and exhibitors the chance to meet like-minded business managers and owners intent on gaining inspiration, gathering new ideas, getting motivated, and picking up practical tips and tricks.

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Automatically Renewable Contracts – End of the Line

Ofcom today announced a decision to amend General Condition 9 in order to prohibit Automatically Renewable Contracts (ARCs also referred to as rollover contracts or rollovers) to residential customers and small businesses with no more than ten employees in the fixed voice and broadband sectors.

For fixed voice and fixed broadband residential and small business ARCs the prohibition on the sale of new ARCs will take effect on 31 December 2011. This means that the sale of new ARCs will be prohibited from that date.

Now all we need is a similar decision from Ofgem for Utility supplies!

Further details of the Ofcom decision can be found here including provisions for existing contracts:

Auditel Consultant David Powell to conquer Kilimanjaro for Charity

Leeds-based Auditel cost and purchase management consultant  David Powell is going up in the world! A few days after his 35^th birthday on September 17th, he is planning to trek to the summit of Mt. Kilimanjaro – 19,341 ft above sea level. This is Africa’s highest peak and entails a climb from 5000 ft to nearly 2o, 000 ft in just six days.

David, who has never done much more than walk up and down Sheffield’s peaks as a student many years ago, will be in a party of 13 trekking for up to 10 hours a day for the children’s charity, Candlelighters. Each of the team has an individual target of £2500, with a hoped-for overall total of £50,000.

Candlelighter, also based in Leeds, was established in 1976. It is a charity formed and run by parents of children who have or have had cancer and the medical staff who treat them. The charity provides essential services and support to children with cancer and their families.

Kilimanjaro is sometimes seen as the ‘easiest’ of the seven continental peaks, because there is no technical climbing with ropes or crampons. However, it is still a great challenge and at the higher levels, the air carries only 30% of the normal oxygen content.

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Small Businesses suffer at the Hands of the Energy Giants

Following similar announcements from some of the other big six energy suppliers, I notice that Energy Secretary Chris Huhne took an unexpectedly tough line in his response to Scottish and Southern’s statement of its intention to raise prices last month by reportedly saying this was “disappointing”. Go Chris, fighting the good fight for the embattled consumer! Disappointing is something of an understatement methinks compared to the typical reaction to the circa 18% increase in gas prices and 11% increase in electricity prices that will be impacting on bills from this September. I shouldn’t mock though – I know he’s had big problems lately getting his ‘points’ across… (allegedly)

The energy companies are citing increases in wholesale prices as the reason for the latest rises, driven in part by world events such as those in Japan and North Africa/Libya. But it seems to many that they have been making excessive profits at their customers’ expense and there have been calls on the Government and the Regulator (OFGEM) to act. Dumfries and Galloway MP Russell Brown has said that this explanation given by the energy companies “rings utterly hollow” because “wholesale gas and electricity costs are over a third cheaper than in 2008 but the energy companies are charging their customers hundreds of pounds more.” And it seems like OFGEM might at last have been listening. In March this year the regulator published the findings of its ‘Retail Market Review’ – an investigation it started towards the end of 2010 into the markets for electricity and gas for households and small businesses in Great Britain.

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