DD FOR ENERGY

jrawle

debitcardmayhem said:

Mommasue said:

I feel its a fairer way to pay my dues. They have the use of my money, and we both earn interest.

Yes but you forget that you have 1 months of their energy without paying them any interest

It's called retail. The retailer makes a profit on the product they have bought in advance from a wholesaler, but bears some risk in doing so. I don't pay Sainsbury's in advance so that they can stock the shelves ready for when I visit the following month.

matt_drummer

jrawle said:

debitcardmayhem said:

Mommasue said:

I feel its a fairer way to pay my dues. They have the use of my money, and we both earn interest.

Yes but you forget that you have 1 months of their energy without paying them any interest

It's called retail. The retailer makes a profit on the product they have bought in advance from a wholesaler, but bears some risk in doing so. I don't pay Sainsbury's in advance so that they can stock the shelves ready for when I visit the following month.

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

Qyburn

Symbio used to bill electricity in advance.

jrawle

matt_drummer said:

jrawle said:

debitcardmayhem said:

Mommasue said:

I feel its a fairer way to pay my dues. They have the use of my money, and we both earn interest.

Yes but you forget that you have 1 months of their energy without paying them any interest

It's called retail. The retailer makes a profit on the product they have bought in advance from a wholesaler, but bears some risk in doing so. I don't pay Sainsbury's in advance so that they can stock the shelves ready for when I visit the following month.

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

I don't have a credit agreement with Sainsbury's. Business do have credit agreements with suppliers and that's exactly how they pay, by invoice typically 30 days later. A better example is a restaurant, where you pay after eating, or a hotel, where you pay on leaving, but with your payment method on file when you arrive. If energy companies want to stop offering credit accounts, they should stop discriminating against those with a poor credit history, forcing them onto expensive pre-pay tariffs. If people want to lose interest by paying advance for their energy because they are unable to budget for the winter, that's fine with me, but if energy companies are going to offer a credit facility, they should offer a way to pay on that basis, not just use it as a charade to justify ripping off those less able to pay.

matt_drummer

jrawle said:

matt_drummer said:

jrawle said:

debitcardmayhem said:

Mommasue said:

I feel its a fairer way to pay my dues. They have the use of my money, and we both earn interest.

Yes but you forget that you have 1 months of their energy without paying them any interest

It's called retail. The retailer makes a profit on the product they have bought in advance from a wholesaler, but bears some risk in doing so. I don't pay Sainsbury's in advance so that they can stock the shelves ready for when I visit the following month.

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

I don't have a credit agreement with Sainsbury's. Business do have credit agreements with suppliers and that's exactly how they pay, by invoice typically 30 days later. A better example is a restaurant, where you pay after eating, or a hotel, where you pay on leaving, but with your payment method on file when you arrive. If energy companies want to stop offering credit accounts, they should stop discriminating against those with a poor credit history, forcing them onto expensive pre-pay tariffs. If people want to lose interest by paying advance for their energy because they are unable to budget for the winter, that's fine with me, but if energy companies are going to offer a credit facility, they should offer a way to pay on that basis, not just use it as a charade to justify ripping off those less able to pay.

Thank you for explaining that to me.

I am an accountant working in a multi million pound international business. I am the only accountant working here and handle 10's of millions of pounds all on my own.

Previously I worked in accountancy practices.

For most businesses credit accounts are due for settlement on a net monthly basis, that is the end of the month following the month of invoice.

The majority of our invoices to our customers are on this basis but most of our suppliers of the product we sell actually require payment on delivery to a port. That is how it is with many commodities.

Assuming that energy suppliers get 30 days credit is not necessarily correct.


You used the example of not paying a supermarket in advance to stock their shelves.

A supermarket is not a good comparison to an energy retailer, they are not the same type of retail businesses.

Your energy retailer supplies you with goods and services without you necessarily having to pay for them at the time of delivery.

Sainsbury's and other supermarkets won't do that.

Of course you could pay for your supermarket shopping using a credit card.

But if you have a bad or a poorer credit rating you may not get a credit card or if you do, you may pay higher interest rates.

Consumers with poor credit histories usually pay more for goods and services as they present more of a risk of non payment.


I think prepayment energy meters actually work out cheaper now for most people, or have I got that wrong?

jrawle

matt_drummer said:

jrawle said:

matt_drummer said:

jrawle said:

debitcardmayhem said:

Mommasue said:

I feel its a fairer way to pay my dues. They have the use of my money, and we both earn interest.

Yes but you forget that you have 1 months of their energy without paying them any interest

It's called retail. The retailer makes a profit on the product they have bought in advance from a wholesaler, but bears some risk in doing so. I don't pay Sainsbury's in advance so that they can stock the shelves ready for when I visit the following month.

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

I don't have a credit agreement with Sainsbury's. Business do have credit agreements with suppliers and that's exactly how they pay, by invoice typically 30 days later. A better example is a restaurant, where you pay after eating, or a hotel, where you pay on leaving, but with your payment method on file when you arrive. If energy companies want to stop offering credit accounts, they should stop discriminating against those with a poor credit history, forcing them onto expensive pre-pay tariffs. If people want to lose interest by paying advance for their energy because they are unable to budget for the winter, that's fine with me, but if energy companies are going to offer a credit facility, they should offer a way to pay on that basis, not just use it as a charade to justify ripping off those less able to pay.

Thank you for explaining that to me.

I am an accountant working in a multi million pound international business. I am the only accountant working here and handle 10's of millions of pounds all on my own.

If you are an accountant, then you will understand that this is a money saving site, and that the aim is to end up with the most money still in your account. At the moment, it's cheapest for me to pay for energy I have actually used, not to pay a random amount to build up a large credit that I earn no interest on. The only way this would not be the case is if there was a supplier who didn't offer this payment method, but who offered lower energy prices, as used to be the case. While there is effectively no competition in the market, I shall be choosing a supplier that lets me pay in the way that saves me the most money. I would advise anyone else to do the same, unless they find value in having a fixed monthly payment. I don't really care about supply chains or practices of energy suppliers or any other business. Who cares if the supplier makes less profit because I am earning interest on money in my savings account instead? While such an arrangement is possible, the MSE way is to take advantage of it.

matt_drummer

jrawle said:

matt_drummer said:

jrawle said:

matt_drummer said:

jrawle said:

debitcardmayhem said:

Mommasue said:

I feel its a fairer way to pay my dues. They have the use of my money, and we both earn interest.

Yes but you forget that you have 1 months of their energy without paying them any interest

It's called retail. The retailer makes a profit on the product they have bought in advance from a wholesaler, but bears some risk in doing so. I don't pay Sainsbury's in advance so that they can stock the shelves ready for when I visit the following month.

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

I don't have a credit agreement with Sainsbury's. Business do have credit agreements with suppliers and that's exactly how they pay, by invoice typically 30 days later. A better example is a restaurant, where you pay after eating, or a hotel, where you pay on leaving, but with your payment method on file when you arrive. If energy companies want to stop offering credit accounts, they should stop discriminating against those with a poor credit history, forcing them onto expensive pre-pay tariffs. If people want to lose interest by paying advance for their energy because they are unable to budget for the winter, that's fine with me, but if energy companies are going to offer a credit facility, they should offer a way to pay on that basis, not just use it as a charade to justify ripping off those less able to pay.

Thank you for explaining that to me.

I am an accountant working in a multi million pound international business. I am the only accountant working here and handle 10's of millions of pounds all on my own.

If you are an accountant, then you will understand that this is a money saving site, and that the aim is to end up with the most money still in your account. At the moment, it's cheapest for me to pay for energy I have actually used, not to pay a random amount to build up a large credit that I earn no interest on. The only way this would not be the case is if there was a supplier who didn't offer this payment method, but who offered lower energy prices, as used to be the case. While there is effectively no competition in the market, I shall be choosing a supplier that lets me pay in the way that saves me the most money. I would advise anyone else to do the same, unless they find value in having a fixed monthly payment. I don't really care about supply chains or practices of energy suppliers or any other business. Who cares if the supplier makes less profit because I am earning interest on money in my savings account instead? While such an arrangement is possible, the MSE way is to take advantage of it.

And nobody, not even me is telling you not to do that.

I only responded to your example comparing a supermarket to an energy company, they are not the same, most energy companies will let you have goods and services without paying for them, supermarkets don't.

There are always other ways to look at things.

In our business paying early has certain benefits. We may lose interest on our money but when supply of what we sell is limited we get preference over other customers. In the end we make more money as we have more goods to sell than we would have had if we stretched payments to our suppliers.

So, of course, energy retailers and their customers do not have the kind of relationship that I describe above and nor should they.

The energy companies are not earning vast amounts of interest on customers credit balances, what they are actually doing is reducing borrowing costs.

I would expect that if energy companies did not have customer credit balances then they would have to borrow more money and that costs would rise. Eventually those costs would make their way to consumers.

If the energy companies don't make profits then prices have to increase, whilst you may not care too much about them making less profit it is of relevance to you.

Until recently there was not much opportunity to earn interest on savings. I suspect that even now it wouldn't amount to much on most balances.


However, I was never criticising your approach to paying your energy bills, just your comparison to supermarkets!

JohnSwift10

matt_drummer said:

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

You do if you pay by credit card, though technically they are paid by the bank and you pay a month or so later. 

matt_drummer

JohnSwift10 said:

matt_drummer said:

I expect you don't relieve Sainsbury's of the stock on their shelves today and then pay them one month later for it?

You do if you pay by credit card, though technically they are paid by the bank and you pay a month or so later. 

Thank you, yes you can.

I posted that at 12.20 pm today.

As you say, Sainsburys get their money when you take the goods (well almost as they have to wait a while).

pseudodox

Many people are absolutely fine with paying lumps of cash upfront to energy companies even when they have no information on exactly how much energy they are using/will use going forward.  Very generous to fund free borrowing for the companies!  But how many of these people get paid on Monday for the working week ahead, or on the first of the month in anticipation of then doing a month's work for their employer?  There are lots of different supply & payment strategies in the world today - a business has to operate the one that best suits.  But not at the expense of customers if they offer no choice.  

Different ways of paying energy bills suit different people - we should all have choices.  My energy supplier gets paid monthly on an agreed date for what I have used - of course I have had energy available throughout the month & not all of it on the first day.  But when my DD is taken my account balance is nominally NIL, but of course between that day & my just paid bill I have used more energy.  But at no time does the company have to review or alter my DD to change my payment up or down.  And once they have my payment I will not be requesting a refund of an overpayment or accumulated credit.  More admin time saved.  They know from when they issue a bill just how much they will get in their coffers 10 days later & it is guaranteed to stay there.