Take Control of Your Service to Cash Cycle

Aug 7 • Features, Management • 637 Views • No Comments on Take Control of Your Service to Cash Cycle

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John Cameron, General Manager, Trimble Field Service Management outline some key areas of focus for organisations looking to improve the cash flow of their field service division…

Want to know more? There is a detailed white paper on this topic which is available for fieldservicenews.com subscribers.

If you are a field service professional you may qualify for an industry practitioner complimentary subscription. Use the link below to apply and we will send you a copy of this white paper instantly as a thank you for your application.

Click here to apply for a subscription and receive get the white paper sent straight to your inbox now. 

Note: Please do take the time to our T&Cs (available in plain English at fieldservicenews.com/subscribe) and note that this content is sponsored by Trimble Field Service Management)

 

For equipment dealers and companies that manage large service operations, service-to-cash cycles can be a headache. Indeed, the gap between when a technician is assigned a job to when accounting receives payment and recognises the revenue, can turn out to be one of the most stressful tasks if it is prolonged. Why? Because it can put a squeeze on your cash flow and profits.

Aberdeen Group reports that the average service-to-cash cycle is 34 days, with the best performers able to reduce this to around 26 days.

What Causes Long Service to Cash Cycles? 

A recent Trimble study1 amongst equipment dealers and service organisations found that most payment delays will often lie in the service-to-invoice process.

The main reasons for this being:

1. Paper forms are still being used by technicians to capture job details

40 per cent of those surveyed either do not use mobile devices to capture data in the field or are still in the process of rolling it out. If technicians must wait until the end of the day to enter job information, or if back office staff must manually enter job data into a separate billing application, the closing of work orders will be delayed.

2. A lack of visibility into customer data 

When a work order is closed, not having instant access to view customer data, such as discounts, service contracts, warranty info and equipment data may delay the work order process in the back-office.

3. A lack of process automation

When an invoice is generated and sent to the customer, there is a lack of process automation that would otherwise enable invoice creation and email upon work completion. Automated workflows also lack when exceptions occur eg: if additional parts are needed during a repair. 39% of those surveyed admitted that it takes 14-30 days to get an invoice to a customer once the job has been completed.

4. A lack of visibility into job details for the customer

When a customer receives an invoice, there may be little or inconsistent job details added, so the customer disputes it. There may also be no process automation or easy-pay options causing the customer to be dissatisfied and payment is delayed. 48% of those surveyed had no process in place for their customers to pay online.

What is the Impact to the Business?

Long service-to-cash cycles tie up excessive amounts of cash for working capital, instead of using that money to grow the business. When the service workflow and cross-departments are not connected, there is no real-time view of what’s going on in the field. What’s more, if paper-based forms are being relied upon to inform billing departments, the service organisation can suffer from both delayed and missed revenue.

For example, all too often, a technician will arrive at a job to find out that there are multiple items that require a fix. He may perform these fixes, run over his allocated time for the job and forgets to jot his extra hours down as he urgently moves on to the next job. This may end up in customers not being billed for all relevant hours, resulting in missed service revenue.

How Can You Improve Your Service to Cash Cycles?

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

Since each customer has different service requirements and service delivery can be complex, connecting your entire service workflow with a flexible and automated solution and following a three-step “manage, mobilise, monitor” process, is vital to making sure that no money is left behind.

Manage

An advanced service workflow solution automates workflows and completely removes 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.

It is important to ensure that the service workflow solution 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.

Mobilise

Equipping technicians with a mobile device out in the field enables them to connect and share real-time information with the back office, customers and equipment. They can capture the exact parts used on a job and change work orders to accurately reflect what services were performed onsite, which means that no profit is left on the table. Additionally, if the technician was able to perform some preventative maintenance at the same time, they 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.

Want to know more? There is a detailed white paper on this topic which is available for fieldservicenews.com subscribers.

If you are a field service professional you may qualify for an industry practitioner complimentary subscription. Use the link below to apply and we will send you a copy of this white paper instantly as a thank you for your application.

Click here to apply for a subscription and receive get the white paper sent straight to your inbox now. 

Note: Please do take the time to our T&Cs (available in plain English at fieldservicenews.com/subscribe) and note that this content is sponsored by Trimble Field Service Management)


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