Irregular cash flow, revenue loss due to increased equipment downtime, or limited financial insights into rental fleet performance. These are some of the challenges you might be familiar with as the CFO of a rental business.
To ensure you’re staying ahead of these challenges, you’d want to adopt technology that ensures your business is adapting to fit the changing rental market with evolved technological trends and customer demands.
However, with the plethora of technological solutions at your disposal, you would want to know which software would be the right fit to solve your rental business’s current and future needs.
72% of CFOs have the final say on the technology direction of their enterprise. But before exploring solutions it’s critical to identify the problems you are trying to solve. Only then can you find a solution worth investing in that will fill the gaps.
One such solution is rental-specific software embedded in an ERP system.
With over 17 years of experience in the rental industry, we at To-Increase have worked with organizations in industries such as construction, crane, high-tech, tool-hire, manufacturing, and more to streamline their rental operations by leveraging the power of rental-specific ERP software in Microsoft Dynamics 365 Finance and Supply Chain Management.
This article will discuss the top 6 challenges that rental businesses have and how you can proactively address these challenges using the right rental ERP software.
What are the top 6 challenges CFOs in rental companies face and how can rental ERP software solve them?
As the CFO of a rental company, there are a myriad of challenges you have to address regularly. Some of the top operational challenges you could face:
Irregular cash flow
Effectively managed cash flow depends on the rental inventory and demand. With more customers looking to rent and expecting flexible offerings, you need to have a 360-degree view of your inventory to rapidly respond to customer demands and properly manage the supply chain.
The solution: A rental ERP with an end-to-end financial capability, so your rental company always has all the contracts, renewals, invoices, and credits in a central location. It can have standard templates for billing models and offer full visibility to stock on hand across different depots and sites. This single view enables quick decision-making with a rapid calculation of rental rates while allocating equipment for customer orders.
Lack of collaboration due to communication silos
According to a McKinsey study, 50 percent of tasks around administration, data collection, and processing could be automated with the technology available today. Automating processes can make overall rental operations more efficient, especially when there are various stakeholders involved in the success of a single rental order. However, a lack of communication among the various operations could cause lags, and information gaps resulting in delays or confusion about the rental order. This ultimately leads to customer dissatisfaction.
It is therefore important that the various departments be it service, delivery & transport, rental inspection, planning, or field engineering, ‘talk to each other’.
The solution: Invest in industry-specific end-to-end rental software, embedded in an ERP and based on one technology stack. The software must encompass all departments, including finance, human resource management, rental operations, sales, service, and delivery. Such business automation enables interdepartmental communication, supports collaboration, and transforms from ‘working in silos’ to ‘cross-functional teams,’ ensuring organizational efficiency, better lead-to-cash, and increased customer satisfaction.
Revenue loss due to delayed equipment maintenance
Ensuring your equipment is in its best working condition is essential to ensure maximum uptime and profits. This makes rapid response times to equipment maintenance calls vital. Equipment field service engineers must be empowered to work remotely on the site of the rented equipment and coordinate with experts at the in-house office to carry out repair and maintenance. The ongoing pandemic has just added to the severity of remote operations, and rental companies must adopt the same.
The solution: A cloud-based solution can offer anytime, anywhere access via mobile devices. Such powerful mobile apps provide field engineers with the correct information at the right time, reducing equipment downtime while increasing profits. For instance, a rental-specific mobile app on Microsoft Dynamics 365 that offers quick remote access with the highest security levels.
Unable to manage multiple rental revenue models
The rental market has seen a dynamic change in customer demands, with more customers looking to rent and pay based on consumption or subscription models. To keep up with these trends, you need to be able to handle multiple rental models, manage the revenue generated from each model and bill your customers accordingly.
The solution: You can capitalize on these changing market trends by using an ERP-based rental software that can process multiple revenue streams and allows you to invoice based on the customer requirement, make flexible changes, generate bills, and manage revenue, regardless of the ‘revenue type.’
While dealing with the day-to-day operational challenges, there are certain strategic matters you must consider as well, keeping your rental business’s long-term vision in mind:
Limited analytics and financial insights
As per a Gartner study, 82% of CFOs indicated that advanced data analytics technologies and tools were a top priority for them, but 78% expected it to be difficult to implement successfully. Full visibility across your asset performance through advanced analytics is critical to making future investment decisions.
The solution: An equipment rental software that has advanced analytics models with industry-specific KPIs and BI capabilities. The real-time asset tracking and historical asset information of your rental fleet will provide you with insights on asset performance, utilization rates, booking trends, and much more.
These detailed reports on each rental equipment allow you to make calculated predictions about the future status of the equipment, support data-driven decisions, and contribute to the accuracy of your financial planning and budgeting.
Added expenses to scale-up
One aspect that every CFO is interested in is how much more they would have to spend to increase their operations and business. The pertinent question that follows is — will the software support the growth ambition? Putting your money into software that doesn’t support the long-term goals of your rental business is a waste of resources.
The solution: A rental ERP software based on the cloud will allow you to scale up with speed and ease. The investment required will be drastically lower, considering the amount your business will save on hardware and can free up cash flow you can invest into your core business.
Is rental ERP software right for your business?
You’ve seen how rental ERP software solves the common challenges of CFOs in rental companies. But how do you decide if it's right for your business?
Depending on the requirements of your business and the challenges you are facing, you may opt for an end-to-end rental ERP solution.
However, if you do not want to consolidate your technology in one ISV and a single platform, you could explore other solutions.
On the other hand, if you’re looking for pre-configured software packages offering maximum flexibility, an end-to-end solution that handles the entire rental lifecycle of your business, i.e., rental software embedded in an ERP, would be an option worth considering.
If you’re interested in Dynamics 365 as an ERP platform or are an existing Dynamics user, then you could explore our cloud-hosted, rental-specific software — DynaRent.
The DynaRent solution addresses all the above challenges and manages your financial, operational, and personnel challenges, from lead to cash, in one solution.
You could discover more about evaluating and selecting the right equipment software and how DynaRent can boost your rental business, by checking out this comprehensive equipment rental software toolkit.
The toolkit will offer you the following information:
- A buyer's guide to finding the right rental software
- A checklist of the ERP essentials
- Various examples of how DynaRent can benefit your business
- Calculating the ROI for your rental software
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