$1.4M Utility Bill: Don't Let Mistakes Cost You Business

Everybody makes a mistake now and then, but billing a customer more than ten thousand times the normal rate seems a bit much. This type of mistake can cost a company if not remedied, because the mistake can seem intentional. This is especially true if you are a small business owner charging for a service or product.

This is exactly what happened to Kristin Harriger of Abilene, when she opened her latest electric bill to find that it was for $1.4 million, reports The Associated Press. The bill stated that she was charged 100,000 cents per kilowatt hour, when the rate usually ranges between 8.2 to 12.1 cents. Harriger quickly informed her energy provider, Potentia Energy, which let her know immediately that the charge was in error.

What should a business owner do to lower their risk of mistakes and unnecessary litigation?

Billing and cash management are items that require a close eye. If your balances get out of whack, then you'll end up running out of money and can be forced to close the company. An alternative to closing the company would be to try and obtain more financing to keep the business afloat as you try to reorganize.

If you are worried that an accountant or accounting software is going to lose you more money without any gains, you are wrong. Being neglectful of customers is sure to land a business in hot water because of the fraud and consumer protection laws.

The consumer protection laws cover issues like false advertising, which could be claimed if you forgot what you had advertised and were charging customers more. If a business has enough complaints against it, the Texas Attorney General's office will file suit directly against the business for violations of state law.

The issue is not that your business will be found liable for fraud, but just the scent of fraud will cost you with court fees. So be warned to keep quality records and to be diligent with your billing, so that you don't charge $1.4 million for a utility bill, because going to court will end up costing more than any increase in accounting costs.

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