If your business rents equipment, whether heavy construction, medical, trucks or vans, tools, or other equipment, it’s time to face the fact that you need a much better way to track it than an Excel spreadsheet. Sure, spreadsheets are great tools for managing certain data pieces, but they fall significantly short when it comes to managing rental equipment. Read on to find out why and what you should do instead.
Why Excel Equipment Rental Spreadsheets Don’t Work
Excel spreadsheets have a myriad of problems when it comes to rental equipment tracking, which could easily cost you more money than you realize. Here are just a few at the tip of the iceberg:
Human error is always a potential problem, especially with large amounts of regularly changing data stored in spreadsheets. Ideally, you need to optimize your resource output while minimizing human error as much as possible. The more you rely on updating and changing Excel spreadsheets, the more likely it is that mistakes will make their way into your equipment rental tracking data.
Moreover, as your spreadsheets gain complexity with growth and increasing data, you’ll likely have more errors, including duplicate data, that can worsen existing accuracy problems.
In fact, more than 80 percent of Excel spreadsheets businesses use have some mistakes in them—and that poses a lot of risks. Even minor errors can cost some of the largest businesses millions of dollars, regardless of the industry.
There’s a difference between managing and tracking your inventory, and if you’re using Excel for managing your rentals, you could inadvertently cost yourself a lot of money.
No Real-Time Visibility
Excel equipment rental spreadsheets are static tools. They give you a snapshot in time. At 5 pm yesterday, when you closed, you had five trucks on hand. By 10 am this morning, customers had returned three, and you rented out four more. Your spreadsheet, as of 10 am, will show four trucks on hand.
Great. But what equipment will you have in an hour? After lunch? When you open tomorrow? Who has extended their rental contract, and is the correct spreadsheet updated yet? Will you have enough trucks for tomorrow’s reservations if someone doesn’t come back today? You’ve probably asked all these questions while trying to track down the info you need to answer them from multiple Excel spreadsheets.
You probably also got incredibly frustrated. Even worse, you need to create more spreadsheets to attempt to forecast your supply and demand this way.
That means you get to manually scroll through several separate spreadsheets, workbooks, and pages and then put all that info together.
Maybe you’ve already developed a method for doing this that isn’t as arduous as it sounds. However, it still only provides you single snapshots of your equipment inventory and your finances, if it’s even reconciled that far yet. Combine that with possible mistakes, and you can develop a whole host of problems.
Software integration is one of the keys to effective inventory management and business administration.
While you can link Excel to some of your other management programs using algorithms and have it automatically pull data from those programs, all you’re doing is automating data entry into spreadsheets. You’re not integrating Excel with your other programs.
Integration means your systems and programs are centralized and all work together; Excel can’t do that.
Multi-User Access and Accountability
Editing a spreadsheet works okay when only one person is doing it. When you have multiple employees editing the same spreadsheets, that’s when you’re going to run into more significant inefficiency and a higher potential for mistakes, not to mention sheer frustration.
When you have several people working on the same equipment rental tracking spreadsheets, it’s difficult, if not impossible, to know who made which changes, who has the most recently updated version, and who doesn’t have the latest version of Excel (possibly introducing even more errors). Because of that, when you notice a problem, you have no way to hold anyone responsible for it. All you can do is fix it and hope it doesn’t happen again.
The bigger your spreadsheets get, the more difficult it is to spot mistakes, and Excel may also struggle to manage large sheets. Software crashes are not only frustrating and cost you extra time, they introduce even more potential for repeated or missing information.
No matter how many people you have updating your spreadsheets, doing so is still slow and inefficient. Even if they never make any mistakes (which, again, is unlikely), you’re spending an awful lot of time and money to ensure your Excel spreadsheets remain in sync with your equipment movements. Manual spreadsheet management is downright arduous.
Ultimately, you have people doing nothing but data entry all day long instead of customer service, equipment maintenance, negotiating contracts, or other more productive things.
This all hinders your ability to remain current on your inventory movements, and you fall behind on other things, too.
When you’re just getting your equipment rental business off the ground, Excel is an excellent tool for recordkeeping, tracking, and management simply because you don’t have much to work with yet.
When your business begins growing beyond that start-up phase, your spreadsheets become increasingly complex. Eventually, Excel’s limitations far outweigh any benefits you got from it when you first opened up.
You need rental equipment tracking software that will scale up with your business instead of Excel or a set of disconnected systems that require ever more time to find information and don’t allow you to plan for your future effectively.
The Benefits of Equipment Rental Management Software
The rental industry has experienced massive growth over the last several years, but if you’re trying to manage everything via Excel spreadsheets, you may be lagging farther behind than you realize.
What should you do then? Business management systems designed specifically for rental equipment and tracking address the problems you run into when using Excel or other disparate and disconnected legacy systems. In a nutshell, it allows you to manage your rental inventory, customer invoicing, servicing, field ticketing, sub-rentals, and finances, all in real-time instead of giving you snapshots of moments in history.
Software, like ODT Rentals for Microsoft Dynamics 365 Business Central, solves the problems with equipment inventory management you have with Excel spreadsheets. Not only do you always know where your rentals are at any given time, but tracking them in real-time ensures you can better forecast your demand and balance it with your supply.
It also allows you to instantly react and compensate for unexpected supply issues, like a customer who returns damaged equipment or doesn’t return it when they should.
Integrated Equipment Rental and Financial Systems
If you’re using Excel spreadsheets to track your equipment rentals, chances are you’re also using something like QuickBooks to manage your finances. Like we mentioned earlier, these programs are excellent when you’re just getting off the ground.
However, when you grow, having a scalable system that integrates your equipment rental management with your finances saves you loads of time, effort, money, and seriously bad headaches. You increase your profitability when you can proactively address what you should purchase, what you can rent, and decrease the amount of administrative work you’re doing.
READ: 7 Investment Factors to Consider Before Investing in Equipment Rental ERP
Supply, Demand, and the Competition
One way that rental companies can invest in themselves is with sub-rentals. However, many rental companies are hesitant to do this because it means renting your competition’s equipment and then re-renting it to your customers.
However, this can be an excellent business strategy when executed properly. Sometimes, and especially when we’re talking about the equipment you don’t rent very often, this is both an acceptable and profitable solution to purchasing and maintaining those things.
The ability to analyze your data and determine what equipment you should invest in versus what you can source from other rental companies is an integral part of running a successful business. But, if you’re trying to figure this out based on Excel spreadsheets, you’re basically making a shot in the dark and hoping it hits a target.
You know what will work best for your business when you have the proper analysis and management tools to draw the picture for you.
Centralized Information Management
Remember all those mistakes we discussed with Excel? Dynamics 365 Business Central is an all-in-one solution that helps eliminate duplicate entries, problems with accidentally included or deleted information, and other human errors.
With all of this information in one place, you not only reduce many of the problems you get with Excel, but you also streamline your data management, making it far easier to manage your inventory. That, in turn, increases productivity which results in higher profits.
Since equipment rental cloud software integrates all of your administrative functions, you can also do things like track how often each piece of equipment gets used and when it’s due for service and maintenance.
If you are a company that rents excavators, for instance, a centralized rental management solution will tell you when they’re due for things like checking the track tension, replacing the coolant, and other servicing.
That, in turn, allows you to plan their operations around maintenance schedules.
You’ll also know when equipment is taken out of service unexpectedly (due to, say, an accident) and can compensate for that before it causes a cascade of problems.
OpenDoor Technology has a business application for your equipment rental business that allows you to handle all your information in one place, even from your mobile device. You can do everything from creating invoices and contracts to looking up equipment availability to check and modify maintenance schedules from anywhere.
But Automation Costs Jobs
There are reasons to automate certain functions, and it’s more about having the right type of people that boost services and profits, not necessarily less. So, when it comes to purely overhead administrative staff, fewer jobs in this area is indeed better.
As the equipment rental industry grows, your business will ideally grow, too. As your business grows, you need more utilized staff to keep things running. But you need that staff to be efficient, accurate, and optimized. When weighed down with manual processes, this gets compromised.
Without streamlining administrative functions, you have to hire more staff to perform those tasks. The tasks and spreadsheets become overly complex, communication falters, you experience increasing numbers of mistakes, and your efficiency and customer service both suffer.
READ: How to Grow Your Equipment Rental Business with Less People
Now, factor in how you operate compared to how your competition works. When it comes to accounting and invoicing alone, your competitors can create invoices and bill customers quickly while you struggle to do the same thing in less than twice the amount of time.
It’s the same with servicing equipment. You either have less inventory on-hand when you need it or rent out equipment that doesn’t work as it should because you missed some essential service or maintenance.
While it may mean you hire fewer staff, this kind of automation means you have an efficiently-running business bringing in enough profit so you can take care of your existing staff in addition to your customers.
What To Do Next
When it comes to your business operations and your bottom line, using Excel spreadsheets to manage your equipment rental inventory and operations doesn’t work. You have no real-time information, and you have no centralized system for your other administrative functions.
But most important is that you have no true way to manage your inventory with Excel. That’s where equipment rental management software comes in. It takes all of these functions and processes, centralizes them, and streamlines them, leaving you free to do what you do best.
Let us show you what centralizing and automating your rental operations can look like. Contact Open Door today to get a no-obligation, personalized 30-minute demo of ODT Rentals.