When you’re in the margin-sensitive and hyper-competitive equipment rental business, having access to a real-time, accurate view of your inventory, rental bookings, finances, servicing, field tickets, and other areas of your operation are becoming non-negotiable to profitability and survival.
It’s common for a newer or growing equipment rental organization to acquire a set of tools to run its operations. There is a software solution for finances (often QuickBooks), an app to manage rental bookings, another for servicing or inventory, and manually maintained Excel files for reports or other rental tracking needs. To name a few.
If using multiple equipment rental software programs to run your business sounds similar to your current approach, you are not alone. Not by a long shot. But if your goal is to grow and compete, now is the time to look at the current technical infrastructure supporting your rental management and accept that you need a better way to conduct business than separate systems held together by spreadsheets.
We are here to talk about why and what you can do about it.
Overall, a combination of disconnected business applications will fall significantly short when it comes to running an efficient operation, having on-demand answers to your time-sensitive business questions, or improving your margins. Not to mention, they won’t come close to helping you capitalize on fluctuating market changes, opportunities, and demand shifts. This is mainly because these ‘solutions’ force you into a very hazardous but prevalent practice: manual, redundant data management.
Let’s cover the productivity (and financial) impacts your rental business will likely face if it continues to rely on death by spreadsheets, separate point systems, or a combination of both. Then, let’s fix it.
The Consequences of Disparate Data
There’s an efficient way to track and manage equipment rental operations, and disconnected systems, apps, and spreadsheets aren’t one of them. For starters, it requires a lot of manual work from one or many of your employees on top of their regular job. Not only is this stressful for your staff and costs more time and money every day, but it also introduces a number of risks.
The first risk is financial. When you run your business on several different systems, you have to physically consolidate data from each equipment rental software program and reconcile it to create reports, get analytics, and produce financial statements. That means copying and pasting data from one system to another with no failsafe. This can easily result in mistakes where vital decisions are based on inaccurate or outdated data. In the end, errors in your financial, sales, inventory, and reconciliation reporting could not only cost you in poor decision-making; it could also result in penalties, fines, or legal action.
The second risk is productivity. Whether you have one, two, or ten people tasked with updating spreadsheets and consolidating data, it is still a slow and arduous process. They are double-checking and triple-checking their work for mistakes, and all the while, it’s a redundant task that can be automated with a single all-in-one system. Instead of spending their days on areas of the business that add value, like customer services, equipment maintenance, and contracts, they’re stuck staring into a void of rows and numbers.
As you can see, this approach will limit your overall business development. There is no way to grow when bespoke apps and Excel administration are weighing you down.
How Fragmented Systems Fail: 5 Productivity and Financial Implications
To summarize, here are the consequences of managing your equipment rental business with spreadsheets and multiple systems:
- Costly Human Error
You will always be forced to rely on manual human intervention when your business management programs and systems cannot communicate. Data reconciliation and consolidation often happen in spreadsheets, and without any controls or governance in place, it leaves a lot of room for error. Many rental companies use spreadsheets to consolidate accounting or track inventory – where even minor errors can result in significant financial loss and compliance risks.
- Missed Opportunities
As a static tool, Excel spreadsheets are not real-time depictions of business performance. They provide a snapshot of how much rental inventory you had in stock when you closed yesterday at 5 PM. But today at 12 PM, you’ve already had three trucks returned, and two rented out. If you have a point solution to manage rentals, this process is a lot easier and a bit more reliable – but not if it doesn’t connect to other areas of your business. How do you forecast supply and demand if you don’t have a system tracking this vital information?
- Overworked Employees
Most of your employees already have enough on their plate and don’t need to have the stress and pressure of reconciling numbers on their minds. In the equipment rental business, experienced labor is hard to find, and you need to keep them happy if you want to maintain your reputation and grow your business.
Read more: How to Grow Your Equipment Rental Business with Fewer People
- Inventory Mistakes
Standalone systems and spreadsheets have a significant impact on inventory management and profitability. To be successful in the equipment rental industry, you need real-time visibility of your rental inventory. While you can certainly automate data entry in Excel, pulling data from one of your systems, it’s not true integration, and it’s not an efficient way to operate. There’s no connection with the other important areas of your business and no way to answer how much inventory you have on hand or rented out.
- Business Plateau
When you are a new rental business just getting started, accounting software like QuickBooks and a mix of spreadsheets can satisfy your needs. They’re affordable, easy to use, and do the job. But when you start to increase your customer base, grow your rental fleet, and diversify your business, you’ll begin to notice that your spreadsheets have become too complex to manage. All of the data silos from multiple systems start to weigh you down. Eventually, your system limitations exceed the original benefits and actually hinder your ability to grow.
How to Maximize Equipment Rental Margins in an Increasingly Competitive Market: An Introduction to Equipment Rental ERPRead Now
Fixing The Multiple Equipment Rental Software Program Problem
The solution to disparate systems and data siloes is unified business management software, also referred to as ERP software. In the equipment rental industry, there are all-in-one solutions specifically built to fit your unique industry nuances and requirements. These centralized rental systems provide the platform and functionality to manage your finances, customers, bookings, inventory, servicing, field ticketing, and sub-rentals in one place. Not only do you always know the status of every area in your rental operations, but the ability to track them in real time ensures you can accurately forecast your demand and balance it with your supply.
Thanks to evolving technology, approaching a centralized rental management solution doesn’t have to be daunting or intimidating either. Cloud-based solutions allow you to implement an all-in-one platform without complicated, expensive, or cumbersome hardware and server requirements, and they are securely accessed from web browsers. Furthermore, the advent of cloud computing allows these solutions to scale seamlessly and endlessly, adding users and expanding functionality by simply ‘turning’ them on.
Another big benefit to investing in a unified solution – it becomes the last equipment rental management software system you’ll ever need to buy.
All this to say, most growing rental organizations can no longer afford the impacts, risks, and inefficiencies of relying on multiple equipment rental software programs, spreadsheets, or old legacy systems. The rental companies that can and will survive the rental market and economic swings will largely tie to which ones have the technical foundation to manage it optimally.
Read: Preparing Your Equipment Rental Business for a Recession
As seasoned, 30+ year experts in the equipment rental industry, we deeply understand the importance of data in rental and service business success. Let our passionate industry techies, financial consultants, and rental gurus help you on your journey to becoming more familiar with your equipment rental management options and finding what will fit your needs, budget, and objectives best.
To get started, we’ve developed a helpful guide to finding and selecting the right solution for your rental business.
Would you rather have a one-on-one, personalized discussion? We are here for that too! Contact us today to book a free discovery call. We promise we won’t bombard you with a sales pitch – we are here to discuss your rental business and your goals to see if we are a match to help you meet them.