Utility Bills Across Many Stores: A Process That Holds
How a company with many stores can run utility bills as one process: a store master, a clear owner per bill, an approval chain, the tax step and posting.
A retailer with two hundred stores receives a few hundred utility bills a month: electricity, water, internet, maintenance charges from the mall or the landlord. Each bill is small. Together they are a large and regular cost, and they are handled by the people with the least time for paperwork, the store staff.
When this goes wrong, it goes wrong quietly. A bill sits in a drawer and the connection is cut. A bill is paid twice, once by the store and once by head office.
This article describes a process for utility bills that holds up as the number of stores grows. It applies to any system. A short section at the end says how Xpense handles it.
Start with a store master
Everything depends on a clean list of stores. For each store, record:
- The legal entity that operates it.
- The city and state.
- The cost centre it is charged to.
- A category that matters to your business.
The category is where your operating model shows up. Many retail companies run a mix of company-owned stores and franchise stores, often labelled COCO and FOCO. Who bears a utility cost can differ between them under the franchise agreement. That is a commercial question for your agreements, and your finance team needs to be able to see it in the reports. So label each store, and keep the label up to date when a store changes hands.
One owner for each bill
Decide who files the bill. There are two workable models.
- The store files. The store manager receives the bill and files it. This is quick, and the person who files knows whether the bill is right.
- A central team files. Bills are sent to a shared services team that files them for all stores. This is tidier, and it needs a reliable way for bills to reach the team.
Either works. Leaving it open does not.
What to record on each bill
Keep the form short. A store manager will complete five fields. They will not complete fifteen.
| Field | Why |
|---|---|
| Store | Ties the cost to a location and a cost centre |
| Vendor | The utility or the landlord who raised the bill |
| Bill number | Lets you spot the same bill filed twice |
| Invoice amount, before tax | The base for the tax treatment |
| A copy of the bill | The evidence |
The bill number deserves attention. Two bills from the same vendor to the same store with the same number are almost certainly one bill. Check for that when the bill is filed, across all stores and all months.
Give utility bills their own approval chain
A utility bill is not an employee expense, and it should not travel the same path. The approver of a travel claim is the employee’s manager. The approver of a store’s electricity bill is someone who knows the store: an area manager or an operations head.
A simple chain is enough for most companies:
- The area or operations manager confirms that the bill belongs to the store and looks reasonable against earlier months.
- Finance confirms the vendor and the amount.
Keep the chain short. These bills are routine and they repeat every month.
The accounts step
Before a bill reaches the books, someone in accounts has to complete the tax treatment: the tax code, the HSN or SAC classification, and whether tax is to be deducted at source. Store staff cannot be expected to know these, and they should not be asked.
Make this a separate step, done by accounts, after approval and before posting. Then the store’s job ends with filing, the approver’s job ends with approving, and the tax treatment is done by the people who are trained for it. Which treatment applies to which kind of bill is a question for your tax adviser.
Post it as a vendor invoice
A utility bill is a liability to a vendor. In the accounting system it should be a vendor invoice against the right cost centre, not a journal entry made at the month end from a spreadsheet.
Posting each bill as it is approved keeps the vendor’s account current. It also gives every bill a status that the store can see: filed, approved, posted, paid.
Report by store, vendor and category
With clean data you can answer the questions that matter.
- What did each store spend, by month?
- Which stores are well above others of the same size and city?
- What is outstanding with each vendor?
- How do company-owned and franchise stores compare?
Export the data with the store, the vendor and the bill number on every line. Those three fields are what an auditor will ask for.
How Xpense handles this
- Stores are set up in Xpense with their company, city, cost centre and category. Categories can be named to match how you run stores, for example FOCO and COCO.
- Utility bills are filed per store: pick the store and the vendor, enter the bill number and invoice amount, attach the bill.
- Utility bills can be filed from the mobile app and through the WhatsApp assistant.
- Utility bills follow their own approval chain.
- Accounts add the tax code, HSN and TDS details before posting.
- Approved utility bills post to SAP as vendor invoices, and the bill shows as paid in Xpense when the payment is recorded.
- Utility reports can be filtered and exported with store, vendor and bill number.
In Xpense a category is a label. Bills are filed in the same way for every store.