Auditel Consultant:
Terry Crouch

Does your energy broker affect your cashflow?

31 Mar 2010 | Filed under: Uncategorized

Does your energy or telecoms broker affect your cash flow? Well, if you are using a broker you may be feeling good because they’ve secured you some low rates…or have they? Has your broker improved your cash flow or could the effect of their work even be negative on cashflow?

You might like to ask yourself what commission your supplier is paying to your broker. Commission is a cost that needs to be factored into the cost of purchase. Does the fact that a commission has been paid affect your broker’s independence? Have they provided you with truly independent information or have they simply pushed the suppliers which yield the highest commission? Is your broker worried about your consumption and does he really care if your consumption increases? Does your broker ensure that your contract has been properly applied and that the rates you thought you secured are those you actually are paying? Is your broker actually chasing the market to find you the best deals… or could he be just a bit lazy?

Poor quality brokerage could be costing you more.

By comparison, a cost manager does not need to take a commission and can be entirely independent. Independence ensures that a client gets a service at a given service level that he actually needs. A cost manager doesn’t get paid until he has proven that a client has actually saved money. A cost manager does not hold out a promise of some speculative future savings but only earns from actual savings made. A cost manager has a financial interest in ensuring that consumption, hence costs, are kept low. A cost manager has a financial interest in ensuring that contract terms are properly applied – because he / she doesn’t get paid until that is so.

A cost manager can only have a positive effect on cash flow.