In today's competitive rental market, the pressure on margins continues to intensify. A big challenge rental companies have is to get the most value out of their available rental fleet. In previous spotlight items, we've discussed how to optimize and improve the operational performance of your assets. This spotlight article will discuss how to optimize the financial settlement of your rental fleet. With clear visibility into each asset's financial performance, your organization will be able to make profitable assets investment decisions more effectively and efficiently.
“We define asset management as a global management process through which we consistently make and execute the highest value decisions about the use and care of our assets.”
Our experience working with rental customers is that Asset Management is probably the least appreciated feature, however Asset Management should be a critical process for each rental company! In general, rental companies are asset intensive (high value) organizations and they often operate with out-of-date information systems. As a result, information is stored in different organization siloes causing capital and operating expenditures to steadily increase and customer service to suffer.
A primary cause of lost capital, are procurement mistakes during the procurement process of new assets. Assets depreciate and break down`s over time. The question is, how should you address this normal asset lifecycle in a comprehensive rental Solution?
Dynamics Software Rental Management can help companies overcome these challenges with the following features:
Item Master Data Management
On the Master data record in Rental Management, it is possible the make a link between the operational and financial processes. With this link between the Product and the Asset group/Value Model it is possible to streamline and automate the Asset creation process. This will be error prone to assure the financial data in the system is correct.
Equipment Assessment and Procurement
Given the wide range of types of equipment and the need to invest time in assessing equipment prior to purchase, it is important for rental companies to provide effective procurement systems for purchasing equipment for moving and handling people. The Dynamics Software Rental Solution integrates the Asset and Purchase seamlessly, to fully automate the Asset Creation process.
Dynamics Software Rental Management does not only support the operational processes, but also the financial settlement of the Rental fleet. After the Purchase Order invoice is paid, the Rental Asset is financially activated. From that moment onward the Assets are “acquired” and the net book value of the Asset is known in the system.
After the activation of the Assets, Rental Management can fully take care of the financial depreciation of your rental fleet. Depreciating assets is for Rental Companies an important method of allocating the cost of a tangible asset over its useful lifespan. On the Asset type the depreciation methodology can be determined, allowing the solution to take care of this process fully automatically. Rental Management will propose depreciation journals, allowing Financial Asset Managers to review and to finally post the transaction into the system.
Equipment Cost Overview
Rental Management “Cockpit view” enables you to view, control and compare the operational costs of your Assets. The “Cockpit view” provides companies the ability to perform detailed costing analysis on the equipment they own and maintain. By having one centralized overview you can easily see any abnormalities, from high-level down to specific pieces of equipment. An example is that you can easily compare the maintenance costs for a specific type of equipment across different sites.
Dispose of Equipment
When equipment becomes obsolete, it`s not suitable for use for a variety of reasons (i.e. damaged, can be used but parts need replacing, making it cheaper to buy new equipment, etc) or if there is surplus to requirements, there should be a way to dispose of it. Where possible, recycle equipment by giving it to other organizations who can make use of it as long as it is safe to do so; otherwise it must be disposed. With Rental Management Assets can be disposed/scrapped/sold on a structured way. After the Disposal order is posted the Financial transactions are automatically updated, the asset status will be changed and the financial consequence of the transaction is calculated automatically. In addition, the Operational side is updated automatically to assure the availability of the rental fleet is still accurate. Equipment that has been marked for disposal can also be used as a source of spare parts and the operational history remains available in the system.
Intuitive and accurate Dashboard
Having the information embedded in the system is only one side of the solution. With the intuitive PowerBI dashboards of Rental Management users will have real-time access to the most critical Asset Management information. The true power of the solution is that operational and financial information can be combined to give a complete picture of how assets are performing.
Dynamics Software Rental Management will help rental companies overcome their biggest problems in Asset Management. With the automated Rental Solution of Dynamics Software, your company can begin realizing significant cost reductions, heightened productivity of your rental fleet, and improved overall visibility!