Every business has its pain points, those everyday headaches that interrupt workflow, cause headaches and shave dollars off your profit margin. Do you know what yours are and how much they cost you.
Before developing a custom CRM/workflow management software for a prominent Oregon-based contractor, my company, my development team and I went to work inside the company for 6 months. We rode in the trucks with work teams and sat with the dispatcher and office team digesting the daily events that affected the business for the better and worse. We experienced firsthand everything from the largest to the smallest (but still significant) scenarios within the business cycle where money is lost to inefficiencies and operational headaches. While its effectiveness helping us develop our software speaks for itself, the experience also illuminated many of the common pain points shared by contracting businesses of all sizes. Here are some of the things we encountered and some of the solutions that we were able to create.
We have divided it into five categories that follow the average cycle of business and called it “The 5 Money Pits.”
Click on each of these and you will find a list of common problems, everyday scenarios and solutions that we discovered along the way. Can you relate to any of these?
SALES / QUOTING
Problem. Slow Quoting.
Scenario: Administrative bottleneck getting quotes out. Delays in pricing, detailing and approvals. Low quote volumes.
Outcome: Lost jobs to competitors with faster, more efficient quoting processes.
Our Solution: All authorized users are connected to a shared quoting system that eliminates foot traffic, phone calls and disconnected paper processes.
Problem: Disconnected quoting process.
Scenario: Sales rep goes on vacation and leaves the quote on a personal computer hard drive. A colleague finds the quote but it’s the wrong version. The quote is sent.
Outcome: Jobs are mis-quoted. Money is lost or customer damage control is required.
Our Solution: Active quotes are universally available to authorized employees through a shared location. The system includes version control tracking to ensure accuracy and historical relevance.
Problem: Callback Failure.
Scenario: Quote is sent to customer. Callback scheduling is tracked manually. Callbacks dates are missed, especially with employee turnover and away time.
Outcome: Opportunities are lost. Jobs are awarded to other competitors.
Our Solution: An automated alerting system posts reminders to multiple users about upcoming callbacks and other required actions.
After dialing in their sales process, a northwest electrical sign manufacturer reported an increase in their quoting volumes of 62% after only 6 months. They are currently adding 10,000 sq/ft of manufacturing space to their facility to accommodate additional customer orders.
JOB PLANNING / SCHEDULING
Problem: Double Entry.
Scenario: Quotes from Word Docs, Customer Faxes or secondary systems must be re-entered or manually re-created as work orders.
Outcome: Increased administrative and operational costs.
Our Solution: A proper job management system will convert a quote to a job in one-to-two clicks of a mouse.
Problem: Missing Job Details
Scenario: Dispatcher is constantly looking up zip codes, confirming address locations, google mapping, etc.
Outcome: Excessive administrative time, scheduling errors, logistical problems.
Our Solution: Auto zip code lookups, automated geo-mapping and job details that connect to workers via mobile devices (tablets, phones) and shave measurable hours off job setup time while drastically reducing scheduling and logistical headaches.
Problem: Jobsite Inefficiency
Scenario: 4 workers (at an average billable rate of $75/hr) arrive to a jobsite and it fenced and locked. Furthermore, the jobsite diagram was left behind at the office.
Outcome: Delayed starts, down-time, phone calls, increased drive/travel time, increased job costs, lost profit.
Our Solution: Workers log into the job from mobile devices and find the lock combination in their job notes along with the jobsite diagram and other relavent items that they download and view.
Streamlining their workflow and administrative processes allowed a west coast electrician to accomplish the following:
• Eliminate $52,000 worth of office inefficiency.
• initiate an inside sales campaign using the same employees that delivered a 15% increase in annual revenues.
• Increase labor productivity by 20% (12 workers X 20% increase @ avg billable rate of $75/hr = $280,800).
JOB TRACKING / COSTING
Problem: Untracked Change Orders
Scenario: Worker is on assignment for kitchen re-wire. Customer asks if he/she will fix a broken GFI outlet in the basement while he is there.
Outcome: Worker spends an hour (@ $85/hr) fixing the outlet. Nothing is noted or tracked. The untracked work goes unbilled.
Our Solution: 1. Worker completes the work but marks a comment in the mandatory delay progress update through his/her mobile device. 2. A Simple change order or extra work request is quickly generated from the office or field. Customer approves by finger signing the tablet or phone. Work proceeds. The customer is billed for additional hour of work.
Problem: Warranty oversight
Scenario: Worker is sent out on a warranty call for a broken water heater. Worker arrives to the jobsite and fixes the broken heater. It turns out there were two heaters. The one that the worker fixed was not the one his company installed. He was not aware.
Outcome: . Unbilled service call. Lost revenue.
Our Solution: Worker arrives to the jobsite and logs into the job. He selects the previous jobsite history tab. He notes the serial number of the unit does not match the one in his notes. He finds the proper heater and sees it is in perfect working condition. Customer asks worker to fix the heater anyways and approves a $200 service call charge.
Problem: Retro-Active Damage Control
Scenario: Job goes way over budget. Company does not find out until a week later from the accountant.
Outcome: Too late to fix it now. Money is lost.
Our Solution: Project Manager logs in and views real-time P&Ls for individual jobs. He notes on one particular work order that labor hours are running high for this particular point of the job. He reads through the daily job comments and notes that the materials supplier has been repeatedly an hour or more late. He calls the supplier and they discover a data/delivery error on the supplier side. The error is corrected. The deliveries are no longer delayed. Workers are no longer standing around waiting. The job is back on track.
Simple benefits from things like mobile time tracking, daily job comments, and field-enabled change order tracking delivered eye-opening financial returns to a midwest electrical contractor with 22 field employees. Realtime tracking, catching small change order,and warranty oversights, and simple daily comments added 1.5 hours of billable labor per week / per employee. As a union shop with an average billable rate of $79/hr, this translated into $130,350 annual revenue retention with zero increased overhead.
INVOICING / BILLING
Problem: Invoicing delays
Scenario: Administrator is trying to send customer invoice but is waiting for a week’s worth of handwritten time sheets for workers. The invoice is delayed.
Outcome: Invoices go out late. Cashflow is poor.
Our Solution: Paperless tracking allows workers to log in and out of jobs using mobile devices. Alerts automatically post when laborers do not login on a daily basis. The administrator logs into the job and can view and auto-sort daily entries along with daily progress updates. Invoicing and turnaround are measurably improved.
Problem: Invoicing Errors
Scenario: Administrator bills the customer. A week later, a worker turns in a material invoice for $800. The jobsite was out of area and he was staying on location. He forgot about it until he returned.
Outcome: The invoice has to be re-negotiated and resubmitted to the customer. Customer may dispute. Payment is delayed.
Our Solution: The worker marks posts the materials invoice into the job folder and enters the total.from his mobile device. The billing administrator sees the posted purchase invoice in the billing display along with the suggested markup and includes it in the outgoing customer invoice. The invoice is sent accurately and on-time.
Problem: Invoicing Protocol Oversights
Scenario: The customer is a large restoration company and requires a specific claim form to be submitted with all invoices. This is not passed on to the new billing administrator who sends a month’s worth of invoices to the customer without the claim form.
Outcome: The invoices go unpaid. After extensive inquiry, they must be re-submitted with proper paperwork. Payments is delayed.
Our Solution: The customer profile contains a field labeled “invoicing notes”. Anything entered into this field automatically appears on the billing screen anytime an invoice is generated for this customer. The appropriate claim form is also stored in the customer’s profile. The administrator sees the alert when creating the invoice and attaches the claim form with the outgoing invoice. Invoices are paid within 30 days instead of 90.
Real-time tracking, reduced billing errors and daily progress updates improved average invoice turnaround by 32% and solved cashflow problems for a New Jersey-based electrician with 8 field workers and 2 office staff (one administrator and one estimator). The improved cashflow allowed them to hire an additional journeyman and take on more work which added $92,000 to their annual gross revenues in 6 months.
REPORTING & METRICS
Problem: Manual / Gap Reports Required
Scenario: Company has to report labor hours to 4 different tax regions. Their existing system tracks against jobsite zip codes but does not organize or accept tax regions. The reports are created with time sheet print outs and color coded hi-lighter pens.
Outcome: 8-12 hours a month are spent manually creating these reports.
Our Solution: A custom field was created in the jobs module to link jobsites with specific tax regions. A custom labor report was added in the reports section that automatically sorted employee labor hours by specific tax regions base-on the jobsite locations.
Problem: Multiple Systems with Disconnected Reporting
Scenario: Company uses a CRM for all of their quoting, another system for job management and a third system for invoicing. They are trying to measure their sales performance but cannot accurately connect the dots between leads-quotes-sales and their relationship to customers and sales reps.
Outcome: The company has stopped tracking this information. While they know their sales, they do not know the value of their lost opportunities.
Our Solution: Leads,quotes,jobs and supporting details are tracked seamlessly through one system. The company is able to generate meaningful reports that measure individual and company-wide performance as well as the source of opportunities that turn into new customers and work orders.
Problem: Shared solution with generic reporting
Scenario: Company using a one size fits all software with a standard reports module. Specific reports requests get added to annual upgrades lists that may or may not happen. Their specific needs are averaged out between thousands of other customers.
Outcome: lack of metrics = lack of awareness = lack of improvement.
Our Solution: Each customer system is separate from all others. Unlimited customization potentials and meaningful metrics. Some recent additions include:
- Outsanding Permit Roster.
- Upcoming Inspections Schedule.
- Customer Ranking Report.
- Job Profitability by work type, worker, customer.
Quick access to metrics is helping a Vancouver-based electrician manage business more effectively as business is happening. They are able to get meaningful reports in a few clicks where they had to be created manually before or were not available at all. Here are some examples:
- Labor Hour reporting by tax region – A custom report eliminated an entire day’s work per month using a highlighter pen and spreadsheets. The value of time saved for by this report for this company $3,000/yr.
- Inspections Roster – Administrators can view and organize all of the coming inspections for any given date range at-a-glance.
- Snapshot Reports – Administrators can view P&L reports that display financials in real-time instead of after money is made or lost.
Hope you found these examples enlightening. Regardless of where you are on the efficiency scale remember that taking time to identify your own paint points is the definitive first step towards the solution and will inevitably show up in you profit margin.
Joe Rohan is the owner/founder of 360 Enterprises, LLC and creator of 360e software, www.my360e.com workflow management software designed specifically for electricians and other professional contractors.