What is Enterprise Resource Planning (ERP) software and why does an equipment rental operation need it?
Nothing spells room for error in business, like a lot of moving parts. When those moving parts help hold your operation together, then mistakes can be costly. In the equipment rental industry, that could mean losing track of your equipment, enduring unexpected downtime, or losing profits from unpaid invoices.
Some rental businesses have been using Enterprise Resource Planning (ERP) software to manage their fleet since the mid-80s. These systems help track the activity of both daily operations of rental shops and the lifecycle of their assets.
Defining ERP Software
ERP is shorthand for Enterprise Resource Planning. In general, ERP refers to a software application that helps an organization to keep track of all core business processes. The software collects, stores, organizes, and analyzes data related to measurable business activities.
In the rental business, this software can pull data related to the rental counter, the back-office, accounting, purchasing, warehouse receiving, equipment maintenance, and more.
Enterprise Resource Planning is the generic term for the category of software systems that include Rental Management Software, you can think of it like this...
ERP's are the product class and Rental Management Softwares are the product groups.
When used efficiently, an ERP system will allow you to connect all aspects of an equipment rental operation, becoming the central hub for all your company's workflows.
Naturally, by using technology to take over such a labor-intensive task, investing in this software could save a business a lot of money and time.
The Benefits of Using a Rental Specific ERP
If you’ve never used an ERP before, it can seem like you are taking a massive step into unfamiliar territory.
From automating maintenance schedules to generating utilization reports, there are many operational advantages Enterprise Resource Planning systems provide to rental businesses.
So, you should know upfront. You are taking this massive step in the direction of business success.
Organized Customer Information
Where do you store data about your customers? Do you have all their contact information in one place? What about their rental history or which company account to invoice? Is this easily accessible for all employees who may need to be in contact with them?
Your rental management ERP helps better organize and access customer information to:
- Boost counter efficiency and serve customers faster
- Quickly search for detailed customer account records
- Capture and reuse details like driver's licenses and job sites
- Train new employees with reliable and accurate data
Built to Scale
One of the most compelling benefits of using rental software to support business operations and services is how easy it is to scale up and down.
While your fleet expands from 25 to 200 machines, the right software gives you the tools you need to maintain your performance standards.
Plus, by analyzing available performance metrics like dollar and time utilization, you can grow your fleet more effectively by removing the lemons and adding more high performing assets.
Texada Analytics helps you spot and leverage these types of trends to give decision-makers the power to make informed decisions.
Ultimately, an ERP can help you to better plan your growth strategy and increase your market share.
Cloud-based ERP systems give you real-time access to your entire business from anywhere with an internet connection.
As a result, you can work from the office, the field, or any remote location without having to worry about maintaining a secure VPN to your companies servers.
Here are a few rental shop employees that we've seen benefit from remote connections to their rental software:
- Business owners and branch managers
- Sales team members on the road
- Field mechanics and delivery drivers
- Contracted bookkeepers and accountants
Remote capabilities also assist with scaling as far as catering to multiple locations. All branches of a business can share one central inventory management system, making it easier to sync inventories and operate as one powerful unit.
Online Customer Access and Reservations
Rental specific ERP's can put even more control into the customers’ hands by empowering them to do business with you directly online.
For companies that get a lot of customers browsing inventory on their website, this provides the perfect opportunity to capture reservations.
It reduces the time employees spend on the phone answering questions about equipment availability.
We’ve made recent upgrades to our e-commerce module that makes online rentals more efficient than ever. A few new features available for your customers include:
- Managing open contracts and pickup requests
- Viewing rate calendar for items on contract
- Paying outstanding invoices online
- Editing job sites and PO numbers
- Setting up notifications and reminders
Real-Time Inventory Management
When putting the power of self-service rental in the hands of your customers online, reliable inventory management is critical.
After all, how else would the customer be able to know which equipment was available when and for how long?
Well maintained data in your ERP makes sure that all your rates and asset availability are always accurate in real-time.
Thanks to this, businesses know the status of each piece of equipment at any given time.
To prevent equipment theft, you can connect your inventory to GPS tracking integrations known as telematics. Telematics provides managers a snapshot view of an asset's location, meter readings, and more all in one easy-to-read central dashboard.
As equipment theft is on the rise in the United States, the adoption of live GPS tracking will continue to trend upward over the coming years. Texada integrates with premium telematics partners such as ZTR, Trackunit, and more.
Simplified Contract Management
These days, companies don't enter into rental transactions without a contract, even if it is just an email. While emails are legally binding, they do present a problem when it comes to keeping everything organized, especially as your business begins to grow. A standard rental agreement with terms and conditions that clients can sign is much better.
With an ERP in place, counter operators can generate a contract, capture the customer's signature, and email the customer a copy of their agreement that they can store.
If you don’t currently use an ERP system to manage rental contracts at your business, here are a few reasons you should change that:
- Easily convert contracts into delivery tickets, invoices, and link them to other specific documents
- Electronically storing contracts makes it easy to search historical records for particular customers or assets
- Rental agreements provide a paper trail, should you ever need it for legal or insurance purposes
Integrate Your Accounting
Transactions need to be recorded and collected by the accounting staff, and sometimes companies purchase them separate accounting software. The use of multiple systems or manual data entry can be problematic. When this happens, accounting errors can often follow. It becomes too easy to miss a payment here and there, or even double-up on some.
Errors make it challenging to balance the books at the end of the month, quarter, or year. ERP systems help to eliminate the problem by allowing companies to integrate both functions in one platform, even if the company already uses separate accounting software, such as QuickBooks Online, Xero, or better yet, using a full accounting module in the ERP.
Our customers take advantage of the full accounting package to minimize the number of platforms needed to run their business efficiently. But more importantly, all data flows smoothly and automatically within the system. Accountants and finance teams will appreciate the precision.
Ease of Calculation for Rent-to-Own Options
Sometimes customers will want to purchase your rental assets. With an ERP in place, you can quickly evaluate any piece of equipment to make decisions based on the value, performance, and history of the asset before you sell.
Do you offer rent-to-own or financing options to your customers?
Calculating the monthly or full payments for these purchases can be extremely complicated. However, by having an electronic system in place, once you set up your calculations in the background, you can calculate the rent-to-buy price with the click of a button. Unloading assets for positive cash flow can now be another viable revenue stream.
More Accurate Cost Analyses
Do you know all the costs associated with your rental business? Many business owners don’t. Others may know the final numbers, but lack data on the contributing factors, which limits a company’s ability to be cost-effective.
Why is it important to know what the cost-drivers and revenue-drivers are? By identifying these two factors, businesses can better lower or increase prices to match the income and expenses of each product or service.
An ERP with built-in accounting will also provide the ability to dig deeper into these financial reports across your entire business.
When better cost analyses and efficiency of technology come together, the costs of the business will decrease. Here are some of the many ways in which it does so:
- Reduce the number of paper copies of documents handled within your company and downsize physical storage spaces
- Stabilize cash management to reduce the need for credit and the accompanying interest
- Reduction in cycle billing expenses
- Reduce printing costs by automatically emailing documents to customers
Track Maintenance Schedules
Whether you’re renting aerial lifts, power tools, tents, or big yellow iron, your equipment will eventually need some maintenance and repairs. Enterprise resource management systems help you to schedule maintenance and keep track of all your completed work orders.
When the time comes to sell off some of the older equipment, potential buyers will appreciate access to the full maintenance records of the asset. These maintenance records will help your assets to retain a higher resale value than they otherwise might have.
Field service management software allows your team to complete work orders and track the details of your service calls with a mobile app, or manage field productivity with back-office workflows. And of course, everything syncs seamlessly through your ERP to ensure you're always working with accurate data.
Even small companies can benefit from generating and sharing company-wide reports. Of course, not all the reports will be shared, but you can use reports to support decision making around the company or pricing structure.
You can also use it as a way to thank and congratulate employees for growth. Additionally, reports are a great way to attract potential investors so that you can further expand your business.
Reporting functions are a fan favorite, especially the ability to export industry-standard reports to Excel. Reports can even be automatically generated and emailed to you daily, weekly, monthly, quarterly, or annually.
"Leveraging the detailed reporting available in Texada SRM gave [Alberta Lift] the knowledge we needed to make critical business decisions."
On top of our standard reports, business intelligence (BI) tools can gather and display actionable insights into your business with a few button clicks. Make informed decisions faster and with greater confidence.
Defining Texada Core and SRM
Because of the many applications of enterprise resource planning systems, there are some types tailored for specific industries or tasks. When it comes to equipment rental operations, that system would be Texada Core or SRM (Systematic Rental Management).
Texada Core provides the essential applications that power any rental business such as creating contracts, developing quotes, storing customers, managing inventory, processing payment and performing cycle billing. Core is best served for startup rental operations or companies with one location.
Texada SRM builds more sophisticated functions onto Core with features such as integrated accounting, work orders, logistics management, inspections, and a punch clock tool, plus much more. SRM is powerful out of the box and is also highly configurable to optimize your existing workflows not just for one, but for multiple locations.
Are you looking for an ERP system to supercharge your rental productivity? Are you tired of using multiple platforms? Or manual data entry?
We have what you’re looking for, with countless customizations you can make to suit your precise business needs.
We help our users manage over 10 Billion dollars in rental assets and trusted to perform each day by more than 2,000 rental stores around the world.
Request a free demo today to test out whether or not our software services are right for you. We look forward to seeing how we can help your equipment rental business.