How to Effectively Turn Service-to-Cash

May 11 • Features, Management • 468 Views • No Comments on How to Effectively Turn Service-to-Cash

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John Cameron, General Manager, Trimble Field Service Management tackles the key topic for many service organisations – how to ensure service is invoiced and paid for promptly…

For equipment dealers and companies that manage large service operations, service-to-cash cycles can be a headache. If there is a breakdown or bottleneck in the process, significant payment delays often occur.

How can inconsistencies between the work hours paid to technicians and hours available for billing customers improve?

The clock for service-to-cash starts as soon as a technician is assigned a task and continues until the dealership or company can recognise the revenue.

What is the best way to accurately bill for parts used? How can companies make sure they are not giving away technician time on ‘service freebies’ when he/she arrives onsite? And most importantly, how do you reduce the lead time from job completion to invoicing?

The clock for service-to-cash starts as soon as a technician is assigned a task and continues until the dealership or company can recognise the revenue. The Aberdeen Group states that the average service-to-cash cycle is 34 days, with best performers able to reduce this to around 26 days. Following the three-step “manage, mobilise, monitor” process can help dealers increase efficiency and generate revenue faster.

Manage

The key to effectively managing service-to-cash has to be an all-encompassing service workflow solution — one that is fully integrated with other systems, such as ERP solutions, telematics devices and CRM platforms.

This should include a workflow that communicates in real-time with every other part of the business and allows for streamlined business processes that are repeatable, predictable and instantaneous.

When done right, companies get service revenue into their business as quickly as possible.

Automated workflows help avoid the unnecessary and error-prone task of having to manually enter the same information, multiple times, into different systems and duplicating work. Being able to pull up work orders, billing information, parts inventory, service contract information and customer data in real-time from a single source gives the customer a more tailored experience in a consistent, professional and timely manner.

Mobilise

Allowing service technicians to capture parts actually used, and change work orders to accurately reflect what services were performed onsite, in real-time, means that no profit is left on the table.

All too often, a technician will arrive at a job and only then find out that there are actually multiple items that require a fix.

All too often, a technician will arrive at a job and only then find out that there are actually multiple items that require a fix. Additionally, if the technician was able to perform some preventative maintenance at the same time, he/she wouldn’t need to plan a return trip. Mobile service apps give the technician flexibility to pass this information back to the office at the push of a button.

Monitor

Adding GPS into the equation means that you can verify that technicians are at the job when they say they are. Tracking your technicians through their smart device or vehicle telematics allows you to accurately bill for the amount of time the technician was actually onsite. If a task overruns because its actual complexity wasn’t originally planned for, not only are you able to reschedule the following tasks, but you will also be able to recognise that additional time in the billing process.

The back office can be instantly alerted of job completion through both signature capture on the service app and geofencing to notify that the technician has left the area. This process enables invoice generation automatically, reducing the billing cycle.

Case in Point

Pon Cat operates as the official Caterpillar dealer in the Netherlands, Norway, Sweden and Denmark. It has approximately 1000 service technicians deployed across four countries, supporting numerous customers with sizeable equipment fleets.

Pon Cat worked with Trimble to optimise the inefficiencies in its processes:

  1. Documentation: Pon Cat technicians and administrative staff were spending a significant amount of time after each job to complete the post-repair documentation required to close out a work order and generate an invoice. The typical time to generate an invoice after job completion could be up to 50 days. This time lag resulted in delayed service revenue and contributed to invoice disputes with customers.
  2. Billable hours: Pon Cat was also experiencing inconsistencies between the hours paid to each technician and the hours billable to customers.

The gap measured at 6% and meant that customers were not being billed for relevant hours, resulting in missed service revenue.

Trimble helped standardise and optimise Pon Cat’s workflow, integrating with key legacy systems where necessary. Together, they were able to significantly reduce the amount of non-billable hours, increase the accuracy of reporting, shorten the service-to-cash cycle and ultimately increase customer satisfaction.

Solution

Turning service-to-cash starts with identifying obstructions that are holding you back from receiving payment quickly and accurately. These can quickly be identified by mapping out your service workflow, from the back office, through schedule and dispatch, to those out in the field.

Perhaps you have to wait for work orders to be completed manually when the technician returns to the office, or your finance department has to manually re-key the information into the ERP system, or you rely on technician memory to capture job details. All of these scenarios add extra time to the billing cycle.

Since each customer has different service requirements and service delivery can be complex, connecting your entire service workflow with a flexible and automated solution is vital to making sure that no money is left behind.

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