5 Tips for Construction Equipment Rental Inventory Management
Construction inventory management is key to your profitability, but it can be time-consuming and tedious without an effective system. When you rely on income from tool rentals – whether renting equipment to external contractors or tracking tool use per project in-house – the task is even more critical.
Typical challenges involved in tracking construction equipment rental include tracking tool usage time and costs, calculating rental fees and discounts, reducing equipment loss and tracking equipment across multiple customer projects and job sites.
Here are a few tips for managing your construction rental inventory to maximize profits and minimize expenditures.
#1 – To remain competitive, it’s important to keep an eye on the big picture. Experts recommend that you track your revenue and expenses weekly in order to adapt to changing conditions.
#2 – Selling off underutilized equipment can really impact the bottom line. Running regular construction tool usage reports with ToolHound allows you to target items with low utilization rates – say below 40 percent – so you can divest those items that are not making money.
#3 – Extending the life of your construction rental equipment beyond normal replacement cycles saves money on new tool purchases. This can be done without increasing the chances of equipment breakdowns by using ToolHound to monitor and schedule inspections, preventative maintenance and tool calibration.
#4 – Limit discounting to make sure that your tool investments pay off. It’s a good idea to have a policy regarding who can discount, and by how much. An inventory management system like ToolHound makes it easy to keep track of discounts, automatically applying the correct rate for each construction equipment rental and reducing human error.
#5 – Sell off equipment with chronic maintenance problems to ensure that you protect your good reputation with customers. Repairs and maintenance expenses can be easily tracked with ToolHound, allowing you to compare costs vs. profits per asset. Evaluate those rental items with significantly high maintenance expenses, and if the problems are likely to continue, consider selling the asset.
The ToolHound External Rental module helps you set up an efficient rental system to your own specifications to manage rental rates, calculate discounts, and report miscellaneous charges and billing rates. Workers can simply scan an item out to the department or contractor and scan in upon return. The equipment rental software automatically calculates rental charges for the time that the item was checked out.
You have a big investment in your tools. Be sure to protect that investment and maximize equipment usage with a robust asset tracking system for streamlined billing and peace of mind.