5 ways to reduce your business energy bills
17 November 2022
Rising global energy prices are a worry for all business owners. When the cost of your predicted annual bill goes up, that’s likely to stretch your cash flow thin.
So, what can you do to overcome the problem of rising electricity and gas prices? We’ve outlined five simple ways to reduce your energy bills.
Simple ways to reduce the impact of the energy crisis
The obvious way to beat the energy crisis is to reduce your company’s energy usage.
With prices going up, cutting your energy consumption makes good sense and should help reduce your annual bill. As an added bonus, cutting down your energy consumption also makes your business more sustainable, more energy-conscious, and a better global citizen.
Here are five ideas for bringing down your energy usage:
- Properly insulate your buildings – you obviously need to be sensible about heating and cooling your workspaces during the hot or cold months of the year. Using heating and air conditioning (air-con) 24/7 can be expensive, so it’s a good move to properly insulate your workspaces. If your rooms stay warmer in winter, and don’t bake in summer, your heating/air-con won’t be working so hard – reducing your energy spend.
- Be sensible with your lighting – lighting is another essential overhead, but also an area where smart gains can be made. Use energy-efficient light bulbs that draw less power. Don’t leave exterior lights on after business hours. And fit sensors in offices, meeting rooms, and workshop spaces that turn off the lights if no-one is using the room. These are small actions that can quickly start to cut down your bill.
- Switch to energy-efficient equipment and technology – the business tech we use is gradually becoming greener and more energy-efficient. Review your company’s main electrical equipment and see how much energy could be saved by moving to updated, energy-efficient tech. With so many pieces of equipment always plugged in and turned on, having tech with low-power modes and automatic standby modes can greatly reduce your energy consumption as a busy office or factory.
- Consider using renewable energy – one way to escape the monopoly of your energy provider is to provide your own off-grid power. Climate change is an ever-growing problem, so switching to renewable energy not only gives you an independent power supply but also reduces your carbon footprint. If you are looking at solar, think about how much power you consume, and when you consume it, to understand the return on your investment.
- Shop around for the most affordable energy provider – finding the most cost-effective energy supplier can go a long way to bringing down your bills. Prices are obviously rising across the sector, but check out what deals are being offered by other energy providers and shop around. Consumer's Powerswitch website offers a useful comparison tool, but it's worth noting, that not all retailers participate. You'll also find lots of tips on this website.
Energy prices are likely to remain unstable for some time, so it’s important to keep a close eye on your energy overheads and their overall impact on your finances.
How often do you get to the end of a working day and wonder where the time went? Perhaps you never got to item 3 (or even item 1!!) on your to-do list. How can you solve this problem without working longer hours? The answer is very simple, but the art in the solution is where the gold is. The answer to free up time is to delegate more – either to existing team members, new people you recruit, or externally to outside contractors. However, if delegation were that easy, everyone would be doing it now, right? So, what is the art of delegation? We say art, because delegation is not an exact science; different approaches are needed depending on who the ‘delegate’ is. Time and effort are required to effectively pass on tasks to others. Often, the time the delegator needs to put in initially is greater than if they did the work themselves – that’s why so many people don’t delegate. The view that ‘it’s quicker for you to do it yourself’ holds you trapped and unable to be more productive and effective yourself. It also stops others from developing better ways to do things than you already know, i.e. if you teach them your way, then they can master that AND add their own value – two minds being better than one. Here are some essential principles to apply to help you to delegate (as opposed to abdicate!): Delegation Assess the task, issue to the right person and support - helps build trust and respect Be specific and crystal clear for greater communication Request they repeat back instructions, so you know you were understood, enabling higher productivity Set a time frame and request clarification that the task has been achieved, ensuring jobs are completed on time and are profitable Both parties to review - opens the door for future work Abdication Issue tasks to anyone and forget about it - shows distrust and a lack of respect Giving unclear and little information results in poor communication Don’t ask if you were understood - results in low productivity Don’t set a time frame – it can mean jobs are delayed and over budget Different expectations can result in disgruntled clients No review results in no future work Delegation is a skill to be learned; applying these principles consistently will ensure long-term success. “No person will make a great business who wants to do it all himself or get all the credit” – Andrew Carnagie Action list: Which tasks am I currently doing that I could delegate to others? What can I do with the time I free up? Who are the best people for me to delegate these to? (Make sure they want to do these as part of their career development). What is the best way to document what is expected and how it should be done? What support and review process is needed to ensure success?
Logbooks are useful records of business expenses relating to work vehicles and this is important when calculating what tax deductions you can claim. Depending on your business entity type, different tax rules apply when you use motor vehicles to earn income, and you might use a logbook to track expenses in different ways. Sole traders and partnerships can claim income tax deductions for motor vehicle expenses if the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can’t claim 100% of vehicle expenses. You need to work out the business use of the motor vehicle to calculate what deduction you can claim. You can do this either by using a logbook to track actual costs or using a logbook over a test period to establish the average business usage. Companies are a bit different. Where company vehicles are used partly to earn income and partly for private use, vehicle costs associated with private use are liable for FBT. Companies can use logbooks to keep track of work-related costs and show either that the vehicles are work-related vehicles which don’t attract FBT where used for work purposes only, or that FBT is accounted for correctly where there is some private use of other vehicles. The logbook becomes a record of work-related use and of private use subject to FBT. Where a company restricts private use of the vehicle, a logbook is used as evidence that employees have complied with the restriction. Whatever type of business structure you have, we can advise you on keeping good records and understanding what you can claim.
Major changes to KiwiSaver were announced in Budget 2025. The KiwiSaver voluntary savings scheme is aimed at helping New Zealand workers save for retirement or buy a first house. But with the rising cost of living, action was needed to make KiwiSaver fit for purpose and more fiscally sustainable as a savings scheme. How will these changes affect your employees and your small business? Let’s take a look at the details of these KiwiSaver changes. Changes affecting your employees First off, let’s outline how the initial changes announced in Budget 2025 will affect your employees and other Kiwi workers: Since 1 July 2025: Younger workers will qualify for government contributions: People aged 16 and 17 will qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify. Government contributions to halve: The government KiwiSaver contribution will halve, reducing the maximum government contribution from $521.43 to $260.72 each year. High earners to lose government contributions: People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions. No change to 2025 government contributions: There’ll be no change to government contributions for the year ending 30 June 2025. These will be paid in July and August at the current government contribution rate. Changes affecting your small business Next, let’s lay out the KiwiSaver changes that will directly affect your business: From 1 April 2026: Employer contributions will rise to 3.5%: From April 2026, the default KiwiSaver contribution rates for both employers and employees will rise to 3.5% – up from 3%. Employees can choose to remain contributing at 3%: Employees who are members of the KiwiSaver scheme will be able keep their contributions at the current rate. They can apply for a temporary rate reduction from 1 February 2026, if they want to continue contributing at 3% from 1 April 2026. Employers can match the rate reduction: As an employer, you’ll be able to match your employee’s temporary rate reduction. Once your employee moves to a higher contribution rate, you’ll need to increase your employer contributions to the default 3.5% rate. Inland Revenue will notify you of this change. Younger workers will qualify for KiwiSaver contributions: People aged 16 and 17 will qualify for employer contributions. If they contribute to KiwiSaver from their wages, you will need to start making employer contributions. From 1 April 2028, the default contribution rates for employers and employees will rise again to 4% (up from 3.5%). Getting ready for the KiwiSaver changes These amendments to KiwiSaver could have a significant impact for your small business. Increased employer contributions will increase your payroll costs and stretch your cashflow, as will making contributions for younger workers in the 16 to 17-year-old age bracket. You'll also need to update your payroll software and processes, to ensure you’re making the correct contributions for the right people, at the right rates.
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