Heavy equipment dealers, along with nearly every industry across the board, are caught up in information and system overload. If left unmonitored, it can be a major deterrent to the success of any business. Although every new piece of data available is not critical when it comes to better decision making, there are a few metrics that need to be regularly measured and monitored using heavy equipment management software in order for dealers, rental and service companies to scale and grow.
For example, when it comes to your parts and inventory department, several metrics help make better informed decisions. Below are the most important metrics for the parts and inventory department in the heavy equipment industry:
Receivables by Customer
Quickly analyze your customers by their current receivables balance and see what salesperson is responsible for each customer. This is a great tool to determine if additional credit is available for customers and their current balance.
Your heavy equipment management software should seamlessly represent how many days you’ve accumulated rentals of your machines by store, customer, and model with the ability to dynamically drill down to the time-period by time segment.
View status by machine make and models. Dealers need to see exactly how many units are available, along with their status, book value, and sales price.
Give your parts department full insight into how individual parts are performing with inventory turnover over time along with ending balance of inventory on hand.
Rental Revenue Invoiced
It’s critical to know how much revenue you’ve invoiced over time by customer, store, and model. Dealers need to be able to drill down to the transactional level details for every number.
This is the most important information to dealers. In-depth insight into your customer’s rental revenue, how much they have been invoiced, and the Gross Profit Percentage. These numbers are important in comparing locations for Gross Profit Percentage against a goal.
Department Gross Profits
Get an in-depth look at sales by department (Rental, Parts, Services, and Sales) and drill into each store to see how they are performing by area.
A rolling sales analysis gives you direct access to store performance over time in the key departments – Sales, Parts, Services, and Rentals. Drill down by store or time-period for more detailed information.
Advanced heavy equipment management software provides instant insight into core financial ratios such as Current Ratio, Debt-to Equity, and ROA over time with trending.
A robust Operating Statement lets dealers analyze performance over time, by store, and across all departments – Sales, Parts, Services, and Rental. You will also be able to expand your Account Levels down to five levels and drill into the transactional-level details that make up any given number presented.
Operational by Seasonality
Analyze seasonal trends in the Operating Statements and filter by accounts, store, account group, and many other dimensions.
Balance Sheet by Seasonality
Similar to the Operating Statement Seasonality, track seasonal trends in the Balance Sheet and filter by department, accounts, store, and many more.
Utilization & Maintenance
View key metrics of your machines such as Maintenance-to-Income ratios, Time Utilization, Potential Rental Days, Rental Revenue Income, Rental Revenue Invoiced, and Maintenance costs allocation (internal, customer, warranty, etc.). This analysis is valuable for both the Services and Rental departments.
Dealer management is a rapidly evolving market, and it’s easy to let old ways stand in the way of progress. The digital landscape is forcing businesses to take a more strategic approach to gathering, analyzing and using data, giving you greater insight into the industry, customers, and performance. The heavy equipment management software solution that delivers easiest access and total visibility to the most streamlined information– available anywhere, on any device in real-time, wins the day.
Hersch Patel, CPA.CITP, is the Managing Director of Consulting Services for Velosio. With more than 19 years of experience in the areas of management consulting, managing and leading business applications implementations, Hersch has an indepth understanding of business strategy, business process, business development, and system control design. He specializes in leading teams which plan and execute business technology projects for the purpose of reducing costs, increasing revenue and improving efficiency. Many projects Hersch and his team lead enable individual clients to realize millions of dollars in cost savings annually. Hersch has also traveled across the U.S. and internationally, leading implementations of business applications and management consulting projects for numerous clients from small businesses to Fortune 500 companies.
Hersch has a Bachelor’s Science degree in Business Administration with a specialization in accountancy from Miami University, and is based in Cincinnati, Ohio.