Managing assets efficiently and effectively is a top priority for every rental operation. Without flexible software designed to meet specific rental management needs, asset management can cause a huge headache. But the right management software can help rental assets realize their full potential. Astute asset management is the cornerstone of a thriving rental business, which in turn, reflects in an improved bottom line.
There are three key elements in the lifecycle of asset management: procurement, utilization and disposal. At any given time, an asset will be in one of these stages. Procurement occurs when inventory is increased by either the purchase or manufacture of a new item for rent. Utilization is the actual rental and return process — the bulk of assets should be in this category. Disposal occurs when an asset is no longer useful and is removed from inventory.
Procurement
Business owners need to track receipt of items against requisition or purchase order, creating a paper trail confirming when the product or products were received and the prices paid for each. Rental management software should track all pieces of information related to the acquisition of these assets, including important data such as source vendors, warranties and delivery fees.
Once a piece of equipment is acquired, it is imperative to enter that item into the rental database as soon as possible. Rental software should assign a unique number to each item of inventory. Should inventory include bulk items such as earplugs, safety goggles or oil, a group number may be associated with the items to simplify inventory.
As soon as an asset has a preset delivery date, it should be entered into the system immediately. The software can then begin scheduling that item for rent based on the future delivery date — with no rental lapse — thus maximizing income.
Under certain circumstances, rental company staff will want rental management software to generate requisitions for purchases of additional assets. This is important when inventory levels decrease, and especially important for items used on a regular basis, such as rolls of sandpaper for belt sanders or rubber hoses for water delivery equipment. Time, effort and expenses can be minimized when rental software proactively tells the user what and when certain SKUs need to be replenished.
For some rental operations, asset management can be complicated by the need for kit rentals. A rental software package should allow rental personnel to create customized kits for sale or rent. Kits can be listed as “required” or “optional.” For example, when renting a floor sander, the system provides an option for the customer to purchase a “sanding kit” containing various grades of sandpaper. However, when renting specialized equipment such as a water pump, the system requires each customer to purchase or rent a maintenance pack that includes specialized clamps for that particular pump. Business owners need the flexibility to be able to name these kits, determine whether they are optional or mandatory, and to cost them appropriately. Kit components may change, depending on the season. A rental software package should be intuitive and flexible, enabling qualified staff to anticipate future inventory level requirements.
Tracking inventory is an ongoing challenge for every rental operation. For multi-location operations, it is more complex. The ability to generate inventory lists for a multi-location operation is essential. With competition for rental services on the rise, customers become increasingly loyal to the rental operation that best services their needs. The rental business that demonstrates careful control of its inventory and knows where each item is at any given time will win a customer's loyalty.
Utilization
Before an asset is released to the customer, rental software should identify the exact location of the product and its current status, based on a unique ID tag. An asset could be available for rent; at a customer's jobsite; in maintenance; being disposed of; being delivered; or waiting for pickup. All of this information needs to be stored and tracked in a rental management software package. Customers appreciate the efficiency that the software offers counter staff. Building customer confidence goes a long way to ensure repeat business.
Customers may also want a variety of different pieces of information, such as asset descriptions, photographs, spec sheets, instructions, safety sheets, availability, rates, discounts and deposit requirements. All of this data should be stored in the software system for easy and immediate retrieval whenever a contract is prepared. Once the rental contract has been completed, additional details such as maintenance requirements and warranty information should be accessible from the system.
Maintenance of rental assets is a critical component that ensures longevity and top performance. Management of this section is aided, in large part, by rental software. There are many methods to schedule maintenance — all of which should be managed by the software package. Whether maintenance happens by meter reading, date, number of days on rent, calendar period, return from contract, or by damage report, it is essential that rental software tracks the status to ensure maintenance requirements are fulfilled. Customer loyalty quickly evaporates when they rent faulty or poorly maintained assets.
There is a delicate balance in the maintenance cycle of an asset. Companies need a rental software solution that maximizes the amount of time assets are being rented. Too much time spent in maintenance will decrease rental income and increase maintenance costs with no incremental benefit. With the right rental software package, rental owners will optimize the schedule so maintenance is performed often enough to keep the asset in good repair, but not so often that rental income is lost.
Disposal
At the end of an asset's lifecycle, one of three options occurs: The product will be disposed of, sold, or removed for scrap. Rental management software should track where assets are and reflect it in the inventory. Key information such as purchase price and book value are essential when determining which disposal method to select. In the case of customer fault, contracts and customer details need to be linked to each asset. With rental management software, the entire lifecycle of an asset can be tracked and asset management as a whole becomes easier and less cumbersome.
When assets are growing and inventories constantly changing, it is almost impossible to track them without the use of sophisticated rental management software. When it includes the correct features, rental management software will simplify a rental business, and customers will be confident in the operation's ability to provide rental equipment where and when it is needed.
Don Whitbeck is CEO of Guelph, Ontario-based Texada Software.
