Energy business expensesConstruction
Being in the energy business can be very profitable and rewarding if business owners are able to effectively manage their energy business expenses. Energy businesses will always be needed. With more renewable energy sources coming to the forefront, the growth potential continues to expand.
The U.S. government reports that the U.S. is the largest energy consumer in the world. In 2016, total investments in the energy industry were $276 billion. The job outlook for technicians in the energy industry is also strong. For example, the U.S. Bureau of Labor Statistics reports that the expected growth in jobs for solar photovoltaic installers will be 105 percent through 2026, which is much faster than average.
Different types of energy businesses
There are a number of different sectors within the energy industry along with many different types of energy businesses. The major types of energy businesses include the following:
- Geothermal businesses
- Solar companies
- Coal companies
- Oil and gas companies
- Wind energy businesses
Coal and oil and gas companies have long been dominant within the energy sector. However, as the public’s interest in alternative energy sources has grown, solar, geothermal, and wind energy companies are quickly growing and seizing a sizeable share of the market. As energy businesses grow, business owners might need to consider smarter energy expense management strategies to prevent losses and increase profits.
Types of technicians who work in the energy industry
There are several types of technician jobs within the energy sector, including geothermal technicians, solar technicians, and wind technicians. Geothermal technicians repair, operate, and maintain residential and commercial geothermal heating systems and geothermal power plants.
Solar technicians assemble, install, and maintain solar panels for commercial and residential uses. Wind turbine technicians are responsible for inspecting, repairing, and maintaining wind turbines.
Other types of technicians
The traditional energy sector that is comprised of oil and gas businesses and coal businesses also employs technicians. Oil and gas technicians work at oil fields and operate equipment that helps to increase the flow of oil and gas. Coal mining technicians spend a portion of their days working underground and a part of their days working in laboratories.
One thing that all of the different energy technician jobs have in common is that they often need to travel. When energy technicians have to travel as a part of their jobs, energy businesses must address their energy business expenses to keep them in check. One way that energy businesses might make energy expense management easier is by giving their technicians energy business credit cards so that they can pay for their costs with the companies’ money rather than their own.
Why now is a good time to be an energy installation technician
Today is a great time for people to become energy installation technicians. These jobs are growing at a much faster rate than other types of careers. Most do not require college degrees but still pay decent wages.
The U.S. Bureau of Labor Statistics reports that the solar electric market grew by 37 percent in 2009 alone, and it has continued to rapidly expand since that time. Becoming an energy installation technician provides people with excellent wages and good job security. When businesses are careful with their energy business expenses and provide their installation technicians with energy business credit cards to use for business- and travel-related purchases, the companies can enjoy even greater growth.
Travel reimbursements and per diem for contractors
Energy businesses that hire contractors to perform installation work may choose to give them a per diem for their expenses or to have them spend their own money and submit expense reports for reimbursements. Businesses that give contractors per diems while they are traveling provide them with daily amounts that they can spend without needing to deal with reimbursements.
The General Services Administration has a tool that allows businesses to look up the average per diem rates for the current fiscal year. For example, in California, the average per diem rate is $94 per day.
Energy businesses that choose to use travel reimbursement systems for their contractors reimburse the contractors for their travel-related expenses that the contractors have paid for out of their pockets. Not all travel is reimbursable, however. The IRS allows businesses to deduct travel expenses for their employees, but it does not allow deductions for expenses that are related to commuting. This means that energy businesses must examine expense reports carefully to make certain that contractors and employees are not submitting expenses related to their commutes.
The challenge of tracking energy business expenses
Tracking business energy expenses can be challenging for energy businesses. It can be difficult for employees to keep track of all of their business energy expenses, and businesses may likewise encounter difficulties with energy expense management.
Employees are expected to log the following types of information:
- Times of arrival and departure at and from worksites
- Gasoline costs
- Food costs to keep them under $10
Employees must also keep receipts for every expense when travel reimbursements are used. These added tasks are in addition to their job duties. Energy businesses may be better served by giving their employees energy credit cards or energy business prepaid cards because doing so can make tracking simpler while also allowing their employees to spend their time on more productive activities.
How employers can be harmed by traditional energy expense management practices
Employers who use traditional methods to manage their energy business expenses may suffer financial harm. Relying on reimbursement systems may expose businesses to losses caused by fraudulent reimbursement requests, and employees may become resentful if they are forced to wait to be repaid for the money that they have spent.
Paper-based methods to manage energy business expenses may also lead to losses. When employees or contractors have to submit requisition forms for every purchase, wait for the approval process and checks to be issued, they are unable to work on their projects until the process is completed. This can lead to losses in terms of processing and labor costs. Using an expense card for energy business purchases may help businesses to keep a tighter rein on their expenses while also saving money on transaction costs and labor.
Another issue is that businesses have to place a high degree of trust in employees who travel as a part of their jobs. Businesses should protect themselves in terms of spending. There are some situations in which receipts may be lost, and businesses might then take their employees’ word for it. This might be fine if your employee is truly trustworthy, but there are a few bad apples in every industry.
Taking employees’ word for it about expenses creates unnecessary paperwork and accounting headaches. If you give your employees energy business debit cards or energy business expense cards to use instead, you can see exactly how they are spending your money and turn the cards off instantly if you identify a problem.
Energy business fraud risks and how to manage them
In addition to managing expenses within a company to prevent losses from internal thefts and waste, businesses also have to protect themselves from external thefts. One issue that energy businesses face when they use energy business credit cards or energy business debit cards is the potential for losses from credit card skimmers.
CNBC reports that credit card skimmers cost an average of $2 billion in losses every year. This type of fraud happens more frequently when employees use their energy business credit cards to purchase gasoline when they are on the road or when they use their energy credit cards at ATMs.
There is also a risk of fraud when employees use an energy expense card for purchases. This could be from a new parts supplier. Some shady suppliers might charge unauthorized items on energy business expense cards. Finally, some employees might attempt to make purchases of personal items if they are given a prepaid card.
Using Visa business debit cards from Bento for Business can help companies to prevent all of these types of problems. Business owners are able to limit the cards to be used to make only specific purchases. If an external or internal thief steals the card number, it will not work.
How to manage energy business expenses
The Bento for Business Visa debit cards allow business owners to control where their cards can be used. They can limit each card to the types of purchases that individual employees need to make for their jobs. The cards can help businesses to get rid of costly and time-consuming traditional expense management systems while helping to reduce the risk of fraud.
Bento is a trusted partner of many companies across the U.S. Thousands of businesses rely on Bento to help with expense management. Hundreds of Bento’s customers have left strong reviews of the company. To see how the cards might work, energy businesses are able to request a demo. Bento also offers a free 60-day trial so that companies can see how the cards work for their business energy expenses before they make a purchasing decision. To learn more, call 866.220.8455.