How your business can deal with rising energy costs

Analyse your costs

If there was ever a time to be smart with your accounting and cash flow, it’s now.

It is vital to keep as much cash as possible in your business and stay in control of your expenditure. You need to work out where you are spending too much money and identify the most profitable areas of business to focus on. 

Find the best energy deal

Prices are high across the board, but you might still be able to reduce the amount you are paying for gas and electricity. 

The commercial energy market is competitive and suppliers are typically keen to increase their customer base. Business premises tend to use more energy than domestic properties so reducing your bill can make a significant difference. 

There are many well-known price comparison websites available, where you can compare energy prices and hopefully find a better deal for your business.

You can also use an energy broker. Although they will charge a fee, they will do the heavy lifting for you. 

Energy efficiency measures 

Steps you can take to reduce energy at your business premises include:

Government Tax Reliefs

The Australian Government is aiming to provide businesses with an annual turnover of less than $50 million with an additional 20% deduction on spending that supports electrification and more efficient use of energy.

Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. This measure is not yet law.

The measure will help small businesses make investments like:

Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

Electric vehicles

Has your business made the switch to using electric vehicles?

Prices for new electric cars remain high, but state and territory governments are investing in charging infrastructures and are keen to incentivise people to go electric by offering a number of rebates and tax exemptions. Read our article for more information on how to benefit.

Increase your prices

You may want to increase the prices of your products or services to offset the impact of energy costs.

Raising your prices is never an easy decision, particularly at a time when your customers are also suffering as a result of the cost-of-living crisis. However, there are ways to do it successfully.

Steps include analysing your exact costs to work out by how much you need to raise your prices and segmenting customers to identify those who will be least sensitive to price increases.

You can also take actions such as adding extra value for customers to soften the blow of a price rise.

We have provided more detailed advice on raising your prices in this guide

How TaxAssist Accountants can help

TaxAssist Accountants can help you with the right advice to support your business.

Call us on 08 6245 7506 or contact us to find out more about our services and to book a free video or face-to-face consultation.

Last updated: 22nd June 2023