Dirty Data Can Cost Properties Thousands in Utilities Overcharges

Image of a dirty keyboard key

 

Something very dirty is happening within the apartment industry. It’s called dirty data.

It’s nothing that will prompt a high-level internal affairs investigation, but this polluted energy consumption information should be of concern to property owners who are watching the bottom line. Dirty data simply is incorrect electricity, gas or water information associated with a property’s utility bill.

Dirty data comes in all sizes and shapes. For example, the read dates are extended so the billing doesn’t reflect a typical 30-day read period. Or the consumption doesn’t match the expense. Or rates are calculated by a multiplier of 100 instead of 10. Before you know it, what should have been a $10,000 bill passes unnoticed through a property’s accounting system at double, triple or, even 10 times the rate. Maybe a month, two months, or a year later, if and when the error is found the cleanup can begin.

By then, the damage has been done.

At a time when the Environmental Protection Agency is beginning to mandate documentation of energy consumption, there is no place for dirty data. With property management teams focusing time running the communities and utilizing their expertise, the dirty secret in utilities continues. That’s where a proven third-party energy management solutions system can help.

Texas Property Overcharged $20,000 from Dirty Data

Utility providers are not perfect. They have issues with reads and bills because of system limitations and human error. Rates may be estimated and changed inadvertently or by procedure and notifications slip through the cracks. Once a rate is erroneously updated, chances are that future bills will reflect the new rate. An apartment property’s sole defense mechanism relies on the community manager or A/P clerk who may or may not catch the problem.

The data is then muddied, as well as the property’s true utility consumption and expenses.

One Texas property recently experienced the ill effects of dirty data by being overcharged tax on a utility. Texas utilities are not taxable and the property had requested the exemption through a third-party energy management solutions provider. All was well for about a year, and suddenly the tax showed up on the bill again. After 90 days, the company caught the error, which had resulted in $20,000 in overcharges, much of which had been paid by the client.

The utility company provided no explanation other than it just happened.

Dirty data happens.

Clean Up Data and Improve Energy Management

Integrating data and analytics enable properties to avoid dirty data while establishing benchmarking at the same time. The actual aggregation of invoices and entering data into a system of automated checks and balances is essential for maintaining accurate, clean data.

Property management companies often have challenges with their A/P departments paying the bills while maintaining accurate utility consumption data. At risk is an expense that balloons out of proportion, negatively taps the bottom line, and also is the basis for incorrect reporting to government agencies, where applicable. The company becomes unable to complete a process of collecting the line item detail, putting data into a system, analyzing it, picking the outliers, and figuring out how to clean it up.

With consistent, accurate input, benchmarking becomes a snap. Companies can compare usages to previous weeks, months, and years to justify expenditures. Anomalies are easily noticeable: High electricity billings during moderate temperatures tend to stick out more.

How Efficient Energy Management Systems Should Work

The first steps are to get every line item detail loaded into a system, and that’s no small feat. To accurately input data, some 200-300 points – such as start date, end date, consumption start, consumption end and comparisons to previous year and amounts – must be included. Every line item for water, sewer, tax, you name it.

Once loaded into a system, the data can be compared over prior months or years and benchmarks are established. Ideally, you want a system that runs through multiple checks and balances so that inaccuracies are flagged and removed. If the data is pretty far out of bounds, phone calls and follow up are necessary.

There is no substitute for clean data.

When going unnoticed, dirty data can muddy even the most efficiently run apartment property in just a matter of months. Getting a handle on energy management can eliminate unnecessary expenditures and show the true picture of utility consumption on a property.

Is your data clean or dirty?

 

 



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John Lis is the president of Velocity, RealPage’s advanced utility solutions management system for the rental housing industry, where he is responsible for the strategic direction and overall management of the division. A graduate of Arizona State University with a degree in political science, Lis has more than 24 years of experience in management, sales and marketing, and utility billing and bill processing in the multifamily housing industry.

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