Do you have excess inventory gathering rust in your scaffold yard? Then, you could be missing out on an easy way to maximize your utilization and cash flow.
The scaffolding rental market is projected to grow at 5.32% from 2018-2022 (source). Renting out scaffolding and equipment can help you expand your business and diversify your revenue stream.
While it is a highly lucrative business, many scaffolding vendors struggle to attain the levels of success they desire.
Without the right inventory management systems in place, managing all of the moving parts involved can become a nightmare.
In this blog post, you will learn more about the secrets to maximizing ROI with scaffolding re-rentals.
What Are the Challenges for Scaffolding Rental Business Owners?
First and foremost, a lack of inventory management is the biggest obstacle to running a rental business. Without the right forecasting, management, and invoicing systems in place, you could find yourself exposed to any number of risks, as described below.
Most scaffolding firms still rely on spreadsheets and paper-based shipping documents for asset management and rental inventory tracking. These approaches are error-prone and full of costly inefficiencies.
Shipping documents are often duplicated or triplicated to track scaffolding rentals from the yard to job site, and back. But they aren’t always properly checked and signed.
In some cases, the shipping list gets lost, making it difficult to keep track of rental equipment coming in and out of the yard. When the shipment arrives, it is not counted correctly due to the lack of verification against shipment. This makes it difficult to capture over-shipments or missing components as they travel back and forth between yard and job site.
Another common problem is the lack of a formal count sheet or inspection procedure for rental inventory, thus limiting your visibility into stock levels. While some generic software can handle trackable items with serialized numbers, bulk assets don’t get accounted for over time. Without regular inventory counts, businesses can lose a fortune due to lost or stolen inventory.
Unfortunately, this is the reality for many scaffolding businesses.
Billing and Invoicing
Inaccurate order tracking also causes all kinds of headaches to the folks in accounting. They rely on physical count of the stock to identify discrepancies between inventory records and the actual stock in hand.
Missing or damaged components that fell off your radar end up not being billed at all. Mistakes in invoicing could cost your company hundreds of thousands each month. And this is where the nightmare begins. You can’t charge customers for repair or replacement costs if these problems get discovered too late. At the same time, a drop in inventory due to equipment failure could lead to unplanned downtime, affecting your rental activities.
Yes. Running a successful rental business isn’t easy.
Don’t pour your money down the drain with inefficient paper- or spreadsheet-based systems or manual inventory records.
We built Quantify to help you automate your rental management, so you can focus on closing deals and improving inventory turnover.
“Quantify took us from tracking being almost an impossibility to being able to do it with a couple of clicks.”
– Jack Dalrymple, Commonwealth’s director of branding and operations
Learn how you can leverage a modern scaffolding inventory management system to manage your rentals with ease.
Quantify: Intuitive and Powerful Solution for Profitable Scaffold Re-Rentals
Quantify offers an all-in-one platform that can streamline your workflow and boost re-rental profitability for both internal and external use. Keep reading to learn how Quantify solves common challenges in scaffolding inventory management and billing.
You can either import product quantities into the estimate or create a new estimate for rentals based on the current inventory located at the job site:
Then, issue the delivery order from your estimate:
The best part? You can manage the entire rental fleet to ensure accurate stock levels for all customers in one place:
As mentioned above, you can generate invoices for all charges, including billable amounts for rent and sales of consumable items. You can integrate Quantify with major accounting tools like QuickBooks, Oracle, and Xero, among others.
With inventory tracking, Quantify will immediately flag missing items when they don’t make it back from the job.
Quantify integrates seamlessly with Scaffold Designer. This means that with just a click you can generate the materials list for your project in Scaffold Designer. Then, you can export it to Quantify to cross-check inventory and manage your project.
Need to make changes to your plan on the fly? You can edit the Bill of Materials, such as adding parts and quantities, and then create instant estimates for your end-users.
Besides monitoring rented items and prices during shipment and return. You can also manage ongoing hire billing by items.
These are just a few of the ways Quantify helps you unlock your company’s profit potential through re-rentals. See others below!
How to Maximize Revenue with Scaffolding Rentals
Beyond inventory management capabilities that you can find in generic software, Quantify takes into consideration every detail that goes into running a profitable scaffolding business.
Maintaining scaffolding utilization rate
Specialized software like Quantify allows you to manage cross-hire in line with your stock record. This way, you can collect data for inventory utilization forecasts.
Generic accounting software only reveals utilization trends over time, meaning you’re not able to use it to determine your actual capacity to handle an upcoming job. Quantify solves this problem with instant inventory utilization reports, enabling you to monitor your utilization rate in real time.
For instance, if you are already utilizing 90% of your current inventory, you may not have enough equipment to serve the next customer coming through the door. Or, if your utilization rate is below 70%, you may be leaving money on the table with too much equipment in the yard.
Ideally, you should aim for a 75% to 80% utilization rate for your equipment fleet to ensure a healthy inventory for immediate demand, and consistent revenue stream.
Generating revenue from the sale of consumable items
With Quantify, you can also sell consumable items that go to a job but never come back. If you have a good stock of items like gloves and harnesses, for example, you can make a profit from them. Quantify enables billing and invoicing of consumable parts as well.
Increasing profit margins with asset valuation
Inside Quantify, you have the ability to track the list price of your equipment purchases and set your rental price based on various costing factors such as average cost..
By blending the original cost into total average fleet cost, you can ensure higher ROI from the monthly rental rate, no matter what happens with daily business transactions.
For example, if you purchase 100 items at $3 per piece and another 100 items at $6 per piece, your average cost is $4.50. Then, you can charge a fixed percentage of the list price ($4.50) as a standard rental rate.
Using an accounting software, you can also track the total asset value and take a depreciation deduction on your tax return to improve profit margins.
Think Scaffolding Business. Think Quantify.
To run a wildly successful scaffolding business, you first need to get organized, especially when dealing with high-volume equipment rentals. Leverage Avontus technology to streamline your processes, add efficiency to operations, and maximize your profit the right way.
Track your asset movements with real-time inventory visibility.
Improve accounting efficiency with fast and accurate billing automation.
Gain insights into your business with industry-specific software solutions.
Are you ready to reinvent your scaffolding rentals? Get in touch with our team for a personal Quantify walkthrough!