And as more and more trade contacting businesses start to understand the value that their data has in gaining an edge in very competitive industries, investing in a job management software solution that offers complete operational visibility is becoming increasingly important.
We are living in an age where intelligent and innovative technology solutions provide the backbone to the running of day-to-day business activities of those in the trade contracting industries. And at the heart of all that is data – information that can show you the who, what, when, where and why of things going wrong (or right!) within the business.
Data is everything and anything. It’s the time it took a field engineer to get to the job site today, it’s the number of jobs that have been scheduled this week, it’s what equipment requires maintenance and more.
However, job management is much more than just tracking engineers and jobs. Job management software has evolved to a stage where it now plays a central role in providing the key insights businesses need to realise the undeniable potential that their data has when it comes to improving cash flow and boosting productivity.
Here, Mathew Wray, simPRO’s Partner Manager in the UK, highlights 7 key areas that advisors should consider when looking to improve the cash flow and productivity their clients’ businesses.
1) Where are losses being made?
Profit and loss analysis helps businesses assess their performance by reviewing the profit/loss status of invoiced jobs.
A lack of insight into why a business’s cash flow is experiencing unexpected variations is one of the most common factors that contribute to poor business performance. By evaluating profit and loss, businesses can quickly identify and work on improving any patterns or processes that are repeatedly occurring in jobs reporting losses.
2) Who are the best customers?
Ranking customers by factors such as turnover, profit margin and average invoice value allows businesses to understand which customers are their most (and least) valuable.
The success of these factors is underpinned by customer engagement. The more engaged a customer is, the more loyal they’re likely to be – which in turn improves a business’s cash flow position in the long-term. This analysis helps identify the customers that perhaps need to be engaged with more in order to further enhance this long-term cash flow position.
3) Which customer payments are overdue?
For businesses that incur the majority of their material and labour costs upfront, it’s vital they get paid promptly.
Being aware of all customers with overdue outstanding invoices, and the amount owing for each outstanding invoice for each customer is vital for businesses who want to improve their cash flow position. With this information, businesses can prioritise chasing the larger overdue invoices needed to improve their cash flow position further.
4) Are projects operating within budget?
During a project, it’s important to be able to easily compare both original and revised estimate budgets to ensure the project remains within budget.
With this information, businesses are in a better position to be able to make adjustments that positively affect cash flow. If it’s identified that a particular project is running significantly over budget, the project owner is in an informed position to decide on the next step. For example, if it’s found that materials are costing more than expected, it may be time to source a new supplier.
5) Is stock being appropriately managed?
A major factor that contributes to job profitability is the mismanagement of stock in jobs. Good stock analysis enables those in the office and the field to quickly identify whether the right materials are stored in the right location (e.g. the engineer’s van) to complete the job. If he/she hasn’t got the right materials for the job, a solution must be found quickly. Relocating materials that sit elsewhere, or ordering new materials may be required to avoid significant damage to job profitability, productivity and cash flow.
6) Does the business have full visibility of work in progress?
Having a system that offers full visibility of jobs that haven’t been invoiced in full, or archived, up to and including a specific date is an excellent way for businesses to monitor jobs with actual costs that are yet to be invoiced. With this information, ‘tidying up’ jobs and cash flow at the end of the week or month becomes infinitely easier for owners and operators.
7) Is contract profitability being tracked?
The key to managing successful contracts is to track the actual costs and expected revenue for the duration of the contract. Measuring the profitability of a contract across different jobs gives businesses the opportunity to assess and act upon areas where costs are rising unexpectedly, or where revenues are falling behind the expected level.