How much does water cost per month for a business?
In the current challenging trading conditions, all businesses want to find the best deal for their utilities, including water and waste supplies. Many are fooled into thinking the highest discount offer will give you the cheapest deal or best value for money, but this is more often not the case…
Don’t let the discount fool you…
If retailer A offers a 15% discount and retailer B offers a 17% discount surely, it’s safe to assume that retailer B is offering the better deal?
Absolutely not! We have seen countless examples of clients being offered great headline discounts of 20% or more on their water bills. Unfortunately, when we analyse the offers, the reality is not always the case.
In Scotland, there is no longer a maximum default tariff meaning retailers can set their own default tariffs, and our analysis shows these can vary by as much a 6%.
If Retailer A discounts from a “standard default” that is 5% lower than retailer B’s “contract default”. The customer would be 3% better off with retailer A’s 15% discount but are usually lured by the promise of the bigger 17% discount from retailer B.
At DB Water we review what the discount % is being deducted from as well as ensure that the discount is being offered on all services. This sounds obvious but there are several water retailers who provide different discount levels to different services:
i.e., We will save you 30% on your water supply (sounds great) but only 5% on your property drainage (not so great this is a huge chunk of my bill) and nothing on your trade effluent (oh…but TE is a 3rd of my bill)
If you already receive a discount of, say 22%, a renewal quotation won’t take this into account, so whilst you forecast to save a further 20% in 2022 as per your quote, the reality is that overall costs are increasing by 2%.
Having an independent expert review your water offers and ensure they’re being compared fairly may save you signing up for a discount that isn’t all it appears to be.
It’s not all about price
Once you get to a price comparison that is fair, the next challenge is to understand what you are signing up to. Not all water contracts offer the same service or terms. Yes, it’s the same water quality but the other terms can vary widely, potentially impacting your costs.
The most common contract terms we see that impact customers are:
- Bill Frequency – This varies from monthly, quarterly, annual, or a combination of all for portfolios. Monthly consolidation of invoices is an option for some retailers.
- Credit Rating – As the economic climate is tough, most retailers have a credit checking process in place and may choose not to quote for your business depending on this or could ask for a deposit prior to supplying your sites.
- Debt Policies – Late payment charges can start from as early as 33 days with some retailers and range from £40 to £100 per invoice paid late. Some also charge interest on top of this
- Payment terms – Some retailers required payment in advance/some arrears, most require payment in 14-30 days from the date of invoice. Be aware of what you’re committing to.
- Payment method – Some discounts are dependent on payment by Direct Debit and penalties are added or price increased if Direct Debits fail or are cancelled
- Termination Fees – Check the termination policy and term of the contract before you sign or you may be tied into a retailer for longer than you want to be.
If in any doubt get in touch for some expert advice from DB Water.
What about Service?
At DB Group we provide a quarterly report to our clients on the service levels their retailer achieves in whichever market they operate in (Scotland/England/both). We use published market performance data, complaints reporting, and Trustpilot/Google reviews alongside our own experience when recommending a water retailer.
We are paid for these services via commissions directly from the supplier so there is no direct cost to our clients for this service. If you’d like more information on our services please get in touch .