£11k electric bill!

I don't even know where to start with this.
Back in 2018 we opened a cafe and choose Octopus Energy as our supplier. We negotiated a fee and set up direct debits and set about turning an old empty shop in to a cafe. This was our first high street business venture, so we had our hands full finding suppliers and getting customers. Cafe business in our town is excessive and within a few feet of us there are 11.
Anyway, needless to say we had very little time to do much else but try and build the business up. And this, it seems, is where the problems with Octopus Energy started.
It was the end of the first year trading and our accountant wanted the bills. It was then we realised that Octopus hadn't taken any money (well only about £100) I contacted them and gave them a meter reading and instantly we were in debt. I tried to negotiate a repayment plan with them and set up a higher monthly repayment, but it soon became clear that they hadn't been taking those payments either. It wasn't long before the electricity bill was out of control.
I complained to Octopus and someone tried to set up a third direct debit, but this one failed as the first payment was adjusted and they took most of the money out of our account and almost wiped us out. They apologised but then that direct debit failed from then on.
In the end I felt that I was the only one that could solve this and set up a direct debit for the energy bill through my own personal bank account and set it up higher than the amount we use. This eventually worked and so far, I've been happy with the knowledge that we are using less energy than we are paying for.
Imagine my surprise when I took a new meter reading only to find out that the direct debit I set up with them not only fell short of paying towards the electricity debt, but fell short of the actual electricity we were using. Octopus were billing me £650 and the direct debit was only £390. Nobody, it seems thought to mention that the direct debit had to be increased as the energy cost had gone up.

We have the same supplier at home. At home the direct debit charges were automatically adjusted when energy prices rose. This wasn't the same for our business.
From what it seems (I still don't have any energy bills from December yet as they haven't made them up) all this time I thouht we were doing the right thing, and now we have an energy bill that will probably end the business.
We really don't know what to do

Comments

  • Big_dog said:

    In the end I felt that I was the only one that could solve this and set up a direct debit for the energy bill through my own personal bank account and set it up higher than the amount we use. 
    Are you sure this was a direct debit, and not a standing order?

    If it was the latter, nobody can vary the amounts except yourself.
  • Big_dog
    Big_dog Posts: 14 Forumite
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    @emmajones1976 It is possible, it was a while ago now.
  • JJ_Egan
    JJ_Egan Posts: 20,281 Forumite
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    Business energy is not the same as consumer products .
    Are you aware of your tariff and past meter readings ?
  • Big_dog
    Big_dog Posts: 14 Forumite
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    @JJ_Egan
    The only past meter readings that have ever been done is by me as they have never bothered. Although the meter is a smart meter, they say they can't use it.
  • Jeremy535897
    Jeremy535897 Posts: 10,427 Forumite
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    There is no cap on business contracts. Smart meters won't work if the mobile signal is insufficiently strong.
  • Robin9
    Robin9 Posts: 12,101 Forumite
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    Business contracts are different to domestic ones and they operate in different ways as they presume that as a business man you have better knowledge and have accountants and solicitors to help you.  My experience is that they bill monthly in arrears by variable DD following a meter reading (either yours or a Smart/AMR). Smart/AMR have the same communication problems as the domestic ones - my commercial gas meters are in cellars and have remote aerials fitted.

    You probably signed (yes a real written contract) back in 2018 for 12 months. A month before the end of those 12 months then Octopus would given notice and a new contract- if you didn't complete that then ever since then you would be on a SVT - in 2019 with a growing business (and hence consumption) -  and these last few months that will have been eye watering.


    Never pay on an estimated bill
  • Big_dog said:
    @emmajones1976 It is possible, it was a while ago now.
    In the business world that is a terrible statement to make and it won't help your cause at all.
    Look through your accounts now and get onto this properly, what has your accountant listed as that portion of the figures ?
    This isn't something that can get missed from your yearly breakdowns because it's one of your top expenditures.
  • Sandtree
    Sandtree Posts: 10,628 Forumite
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    As a business you are supposed to not need the same level of protection from yourself or nasty businesses because you are skilled enough to do things yourself or you are hiring an accountant and other specialists to fill your skill gaps. Nanny state isnt required, you fend for yourself.

    How did you get all the way to the end of first year of trading without reviewing your accounts? Business case/pricing etc is made up of lots of assumptions and you need to be testing those as you go from a wet finger of what your energy use, wastage etc is going to be to real numbers and can work out if you continue at £1.50 for a tea are you going to be in the black or red.

    They arent required to adjust your DD to reflect changes in your use or rate, thats for you to assess until such time as the debt becomes larger than the line of credit they are willing to lend you and then they will call the debt in. 

    Hindsight is a wonderful thing and appreciate its your first business. All you can do is negotiate a repayment plan with them and in the future make sure you are keeping on top of your accounts which includes being billed for things you know you need to pay (dont think they've just forgotten and so you can buy a nicer xmas present for your other half, they have 6 years to chase)... if its not been billed yet accrue money (stick it in another account) so you dont spend it in the interim. 

    Cash accounting for small businesses makes life easier in many senses but the lack of discipline required compared to traditional accounts allows these sorts of things to happen.
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