Episode 17 with Rich Franck – Save Money on Your Utilities

Podcast coverart for Episode 17 Interview with Rich Frank of Audit Associates.

In this episode, I’m excited to interview Rich Franck from Audit Associates about saving money on utility bills. This session is dedicated mainly to businesses, particularly manufacturing companies, non-profit companies, and private schools. While these are the industries where Rich finds some of the greatest savings, we’ll also talk about ways individuals can save money on their energy bills.

So far, in Brevard County, Audit Associates have found errors on every bill for their manufacturing customers. If you’re in manufacturing, it’s worth talking to Rich, and the audit is free. He only makes money, if he saves you money.

Listen to My Interview with Rich Franck

Links and Images from My Interview with Rich Franck

Logo image for audit-associates.com

You can find out more about Audit Associates at http://audit-associates.com/

Email Rich Franck at info@audit-associates.com

Call Audit Associates at 321-242-3224.

Takeaways from My Interview with Rich Franck

  • I was surprised at how many business electric bills are incorrect.
  • Being that they can retrieve up to 36 months repayment for errors, it seems it would be smart to grab an audit quickly, otherwise you’re possibly spending extra money every month that you’ll never get back.
  • I would have not guessed there were so many ways that these errors can occur, for example adding a new building and not having the sales tax set properly.

Complete Transcript from My Interview with Rich Franck

Kim:                             00:00                You’re listening to Space Coast Stories, a podcast with interviews and stories from people and businesses on Florida’s Space Coast. I’m your host, Kim Shivler. Thanks for joining me.

Kim:                             00:15                Hey everybody on the Space Coast. Welcome back to Space Coast Stories. I’m your host, Kim Shivler, and today I have yet another exciting guest with a story that might help you save money. I’m talking to Rich Franck of Audit Associates and particularly for you businesses out there, private schools, manufacturers. We’re going to talk about some of you. You could be leaving money or losing money every single month with your utility bills because there may be programs that you’re missing that the utility companies just. It’s not their job to tell you about to save you money. Welcome Rich.

Rich:                             00:57                Thank you, Kim. Nice to be here with you this morning.

Kim:                             01:00                So first, tell us a little bit about what Audit Associates does and what people, what little surprise people might have if they actually looked at their bills.

Rich:                             01:10                Sure. Be Happy to do that. Well, in a word. We find money for businesses and we find that money in utility bills because nationwide there’s about a 70 percent rate of error and overcharged. That is about 70 percent of the businesses out there have errors in one or more of their bills here in Brevard County. I’m currently running at 82 percent of all my clients have had bills that have either had errors and overcharges on them or there was some other way we could help them save money on their utilities among manufacturers here on the Space Coast on looking at 100 percent. We have not found one manufacturer in the county that has all of their bills being billed correctly. So it, uh, there is money to be found out there and that’s what we like to do to help our, our clients and the neighbor friends.

Kim:                             02:08                It’s so you go in and you help them save this. This is not the kind of thing where you’re coming in and charging a large fee to analyze and be a consultant. You’re actually going in and finding savings. How does that work?

Rich:                             02:22                Well, thank you for asking that question because we actually perform our audit for our clients at no charge. We get paid on contingency only if and when we find errors in the bills. Then we work with the utility companies to get those corrected. We don’t simply bring the problem to the client and say, here’s your problem. Go fix it. We fix it for them.

Kim:                             02:44                That is a key, key, important thing. We fix it for them because so many of us, we hear about ways that you can save or get your bills down, etc. We hear about this and yet we’re already stressed for time. I’m guessing the employees of these companies already have enough on their plate that they don’t need something else to go do, even if it saves some money.

Rich:                             03:08                I think you’re right about that and What we have found is that even amongst large corporations, they treat the bill the same way you and I do with our home bills. We look at it this month and if it doesn’t look grossly different than it did last month or last year, if we’re doing a year to year comparison, we simply pay the bill and assume that it’s correct. The problem is that if there are errors in the bill, they have probably been there for years and so now what is erroneous looks normal to them.

Kim:                             03:39                That’s a good point. So this could have been going on since the inception of the business and it’s not the kind of thing where, oh my gosh, the bill just went up x amount of money.

Rich:                             03:49                That’s correct. Uh, what people I think either don’t understand or expect out of the utility companies is a little more than than they’re going to get. For example, If you have a business that has multiple properties or multiple buildings on, on a property and you have multiple meters and you build a new building, uh, and you add a meter, you add a service, you would think that the utility company has some master account for your, for your business. And if you are exempt, let’s say, for from sales tax for a number of possible reasons, they are automatically going to exempt that new service and that just doesn’t happen. They don’t have a master account for every customer. Now, the major companies like the Harris’s of the world, they probably have a major, a master account, but for every business out there, they don’t have a master account.

Rich:                             04:49                And so the business has to alert the utility companies that they are exempt, if that’s, if that’s the issue at hand.

Kim:                             04:59                And who might be a company that is tax exempt, where you see this happen.

Rich:                             05:03                Quite often we work with five major categories of businesses that have exemptions available to them. And what we find is that they are either not aware that they have the exemptions or they’re simply not following up and chasing the exemptions. But those five categories are a manufacturing. There really are our top client in terms of uh, uh, the amount of money we can find for them a private schools and churches would be number two, not for profits. Just overall would be number three. Number four would be government entities and a number five would be service companies that use fuels, uh, in their, uh, in their businesses, gasoline and diesel fuel. And that’s not a utility, but there is money to be saved in fuel costs if they know how to do it and we can help them find out how to do it.

Kim:                             06:03                And then also along with the energy, you were mentioning that there’s a telecom side to this also.

Rich:                             06:10                Yes, we also work in all of the telecom realm, local, long distance, cellular, internet and cable. Uh, there are lots of errors available and possible in, in the, uh, telecom realm, lots of ways to save money there. What we really do is look at every line item on a bill from the name on the top of the bill to the bottom line, dollar amount. Anything on that bill could be wrong. Just as an example, we have a property management company. It’s actually a property owner’s association that’s been in existence for about 25 years. And when we audited their bills, we found that the bills weren’t even in their name.

Rich:                             06:55                They were in the name of the contractor that developed the, the uh, residential areas and when they, a homeowners association took over the bill, they just failed to change the name on the bill and so they’ve been a paying it in the name of this contractor for 20 some year.

Kim:                             07:12                Oh goodness. So evidently an HOA transfer that didn’t go all the way through. It sounds like where you’ve had a developer come in, develop everything’s under him, and then there’s a, there is an official handoff and then develop her hands off to the HOA. But it sounds like something was missing.

Rich:                             07:27                Somebody just failed to notify the water company in this case that handoff had occurred. And for these exemptions, do they cover all these different areas? Not just electric, which we first think of, but also water, etc. They can, they don’t always necessarily. There’s a broad range of these exemptions.

Rich:                             07:46                And so what we’re talking about are on a, an electric bill. For example, if you looked at a Florida Power and Light bill, uh, the first four items on that bill are charges that actually go to Florida Power and Light. There are probably four or fIve or six additional charges below that that don’t go back to Florida. Power and Light, they are put on the bill by some government agency, the state, the county or the local municipality. Each of those agencies has the ability to write the legal ability to add surcharges, taxes, fees, whatever you want to call them, to the utility bill. And those were the errors a lot of times occur. And you were saying that’s probably where 95 of 95 percent of the errors in the bill will be found.

Kim:                             08:38                And could you give us an example of what one of those errors might be? What would trigger the overcharge in say a municipality?

Rich:                             08:45                Probably the most common one, which, which probably reaches over all of the areas of the business areas that I’ve talked about would be state sales tax. Municipalities are exempt from state sales. Tax schools are exempt from state sales. Tax manufacturers may be exempt from state sales tax on certain expenses. Churches and other nonprofits may be exempt from certain state sales tax on certain expenses. So, uh, if they’re, if they’re not aware of that, they simply pay the tax and, and, and it’s never recovered. However, if we find that they’re paying tax and they shouldn’t be, we can go back as far as 36 months and recover the taxes that they’ve already paid, which can be a pretty nice chunk of change in their pockets.

Kim:                             09:39                So it is on a time basis here. So what we probably want to do folks is go ahead and get this looked at because you can only go back 36 months if you’ve been doing it for 20 years. Well you’re only going to get a chunk of that back. I’m also hearing as Rich is explaining this, that there’s a lot of details here. It’s not even just an exemption on sales tax. He mentioned an exemption on sales tax on certain items. So there is a lot of possibility here. There’s also a lot of knowledge that he brings to do this audit for you. It’s not necessarily something you would just quickly Google and have all the answers to, I’m guessing, is that correct?

Rich:                             10:21                That’s correct. Kim. We’ve been doing this for going on 26 years. We’ve just finished our silver anniversary year and certainly when we got into this business 26 years ago, we didn’t have all the answers either. It’s been a long road of on the job training, so to speak. We actually have to research all the state, local and county tax laws when we take on a new client or work in an area we’ve not worked in before because it’s not just taxes. There are other fees that are involved that may be exempt for these types of businesses

Kim:                             10:57                And because those rules change, the laws change. You can’t always say, oh, well I did that a while ago. Maybe everything’s the same. Bonds are voted in different things where where fees can change. Don’t they?

Kim:                             11:10                That is certainly true. Exactly. So there’s a lot of work. It sounds like this is even more than a. The way your tax law can change every year. Yes. Along those lines then I would recommend you. You did mention that when you look at this for a school or a manufacturer for any of these, this is not a fee that is paid. You’re paid when you find a savings. So if I owned a business like that, I would definitely recommend having, having you look at that. This is also for people just to make sure we know people who are paying the bills for the building. So if you’re renting an office, which I think sometimes smaller nonprofits do, if you’re renting an office where you’re in the office space is covering your lights, etc. That obviously is not going to apply to you as much, although maybe the cable and all would, if you’re running like a voiceover ip system that you’re paying for, would that be correct?

Rich:                             12:07                That is correct. So, uh, the audit may be performed not for the tenant, but for the land owner. That’s correct. And yet the cable and all may be fine for the tenant if they’re having to pay their own phone systems, which we see a lot now where people will run their own voice over ip type phone systems within an office. And that can have a pretty Impactful cable charge sometimes, certainly could. So that would be something you’d want to look at. There’s just a lot of details here to examine to see where savings might be, what we’ve talked about so far as for the big companies and private schools, which there are just so many of those out there.

Kim:                             12:52                Is there a specific size private school that you work with or does any private school work?

Rich:                             12:58                We’ve always prided ourselves in not limiting the size of our client. We’ve worked for some very small mom and mom and pop, so to speak, uh, businesses and some small schools and we’ve worked for some very large universities as well. So no, We don’t set any limitations on who our client can be. And are your services limited to the Space Coast or to Florida as a whole?

Rich:                             13:25                No, we actually work across the country. We have some agents in some other states. We have worked in 35 states over these 25 years that we’ve been in business and we’re having to work wherever the work is.

Kim:                             13:37                So everybody, if you know of someone in a private school, you know, if someone in any of these situations I highly recommend you have rich or recommend that they have rich, take a look at their electric bill.

Kim:                             13:49                Now this is all about business manufacturing, private schools. What about the average homeowner here in Brevard County?

Rich:                             13:58                That’s a question I get a lot. Do you look at residential bills? We don’t look at residential bills simply because it’s not economically feasible for us to do that, but that’s not to say that there might not be some errors in the bill or some other possibilities of have some savings on your bill. And I’ll cite one example of that here in the Florida Power and Light region. And for most other power companies as well, they offer something that FP and L refers to as on call on call service gives the power company the ability to shut off your air conditioning and your water heater for 15 minutes at a time during peak power usage periods. Uh, this helps them distribute the power throughout their grid and equalize the draw on this, on their system. And for that ability to turn your power, your power off to your air conditioning, they give you a $4 and fifty cent credit every month. I’ve had this for years and I have never known if or when on calls utilized in my home and I think you’ll never know if a, if that’s done. So to me it’s kind of a no brainer. Save yourself $4 and fifty cents on your power every month.

Kim:                             15:18                And is there a charge to have them turn that on?

Rich:                             15:20                No, there is not. That’s a, that’s a, that their cost.

Kim:                             15:25                Very nice. So that might be a nice dinner out for the couple if you’ve done that for the year, right? Exactly. Yeah. I can always find somewhere to, to apply a $40 or $50 savings. Sure. Now if I am a business or a school and I’m interested in working with you, but one of my big concerns is, hey, we don’t have time to do this ourselves and if you’re gonna come in and do this, how much time do I need to give you in order for you to do this for us?

Rich:                             15:53                That’s an excellent question, Kim, and I appreciate your asking it. This really takes very little of the client’s time. We might spend a half an hour to 45 minutes with the individual that’s going to sign our agreement. There are a couple of other documents that we have to have and so we’re going to talk about the process and get the documents signed, but in terms of the, let’s say the accounting department or the bookkeeper, that has to actually provide us with the bills. We only need a copy of the most recent bill for each of the utilities or the vendors that we’re going to be auditing from that one bill. We can see what they’re currently being charged. We will be able to find if there are errors on the bill, we also will have access to their entire account so we can look back into history to see if there are charges in the past that they have been charged that they shouldn’t have been, so it’s only one bill of of each vendor that they have to supply to us.

Kim:                             16:59                So it’s not hours of the accounting department out there making copies and we had this huge pile of paper going back and forth, a single bill per vendor. That sounds pretty easy to me.

Rich:                             17:11                Well what’s more Kim, if they really think it’s going to be a time problem for them, we’re more than willing to go into their office, let them pull the bills for us and we’ll be happy to do the photocopying if they’re still keeping their bills on paper today. So many people have their bills digitized and it’s simply a couple of clicks of a mouse to send that bill to us electronically, which we’re happy to receive.

Kim:                             17:36                That sounds like a plan to me. Absolutely. And one other question that just might come up with people, if they’re looking at this or you’re looking at this for their company, sometimes people are concerned when consultants come in that you might actually be representing another vendor trying to, you know, see where you could make other recommendations. How does That fit into your world?

Rich:                             17:59                Another good question. We have no agency relationships with any vendors. We are totally independent so we can truly look at this situation for them in an independent fashion and we, we do work with a number of vendors in terms of getting quotes. We will go out and get multiple quotes for them for a different services, let’s say in the, in the telecom realm, and then the decision is entirely theirs. They can choose or reject any of our recommendations.

Kim:                             18:29                Thank you so much for being with me here today. One last question before we go. For those local homeowners who want to check their bill to see if they are getting that $4 and $50 credit, will they just see that on their actual bill they can look at it easily or is that going to be hidden somewhere in the fine print?

Rich:                             18:47                It will be on the bill. In fact, I think it might even be the first item on the bill if they are enrolled in on call, but somewhere on their FP and L bill, it will say on call and they will see the uh, the credit, now, it may not be $4 and fifty cents. It depends on what they’ve agreed to have. The FP and L turnoff in some cases people just enroll their air conditioning. If they have natural gas water heater, they can’t get a credit on the water heater. So that’s uh, that’s the other piece of it. So it could be a $3 and fifty cents or a dollar fifty cent credit just to clarify that, but thanks for asking.

Kim:                             19:32                Thank you. That is great information and I appreciate, appreciate the clarification there. So check your bill, see what you’re saving, see what you can save. And I think that this is a great time for all of us were starting a brand new year. Start it right. Save what you can. Thank you so much for being here with me. Rich, tell everyone how they can get ahold of you.

Rich:                             19:55                Thanks for the opportunity to be here with you. Kim. I can be reached by telephone at three, two, one, two, four, two, three, two, two, four. Or by email at info at audit a, u d I t dash associates. Info@audit-associates.com.

Kim:                             20:20                And as always, folks will have all those links in the show notes at spacecoaststories.com/energyaudio forward slash energy audit. I’ll see you next time with another interesting guest here on Florida’s Space Coast bye.

Kim:                             20:39                Join us next time for another episode of Space Coast Stories. You can find the show notes and other information at SpaceCoastStories.com. The views of the guests on this show are their own and don’t necessarily represent the views of the show owners, host or company. Thanks for listening to Space Coast Stories.

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