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 cashflow and profits.
Aberdeen Group reports that the average service-to-cash cycle is 34 days, with best performers able to reduce this to around 26 days.
What causes long service-to-cash cycles?
A recent Trimble study amongst equipment dealers and service organizations found that most payment delays will often lie in the service-to-invoice process. The main reasons for this being:
- 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.
- 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.
- 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.
- 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.
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.
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.
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.
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.
For more information on how you can look to take control of your service-to-cash cycle, download our whitepaper.