HVAC sales and service companies, if you were to audit your company’s books to find the biggest controllable overhead expense, what would it be?
If you run your company as a sole proprietorship or as an LLC with one or two members, chances are that your CPA would take a stern look at owner salaries. But owners don’t want to make cuts there!
Your financial advisor would admonish you to keep a significant sum in a warranty expense account. Repairs don’t always work out. You occasionally need to send your technician out again to finish the job. This line item can account for about 2% of your gross sales.
And, if you aren’t careful about your choice of phone plans, even cell phone expenses can add up. But the biggest controllable excessive overhead expense for most HVAC sales and service companies is something different.
It’s an unapplied labor expense. Dollars you spend on employees that you can’t bill to any single job. Think of it as a “running around” expense.
How Can You Capture Undefined Labor Expenses?
Unapplied labor expenses can eat up 20 to 30 percent or even more of your profits. The problem for most HVAC companies is that they aren’t even aware of it, much less concerned about controlling it.
Unapplied labor expense occurs when you send employees to a distributor to pick up an HVAC unit. You incur undefined labor expenses when you pay technicians to enter the shop for their daily assignments. You incur undefined labor expenses when you hold meetings in person or by Zoom. You run up undefined labor expenses when your employees have to bring in a van for repairs.
Some undefined labor expenses are an unavoidable cost of doing business. But you can minimize your undefined labor expense by not having employees enter the shop more often than necessary.
GPS Tracking Systems Can Minimize Undefined Labor Expenses for HVAC Companies
How could you cut back on your undefined labor expense?
You could have your employees take their vans from their homes to their first job every morning and from their last jobs back home every evening.
GPS tracking systems can establish geofencing to ensure that your employees aren’t using your vehicles and equipment—voiding ordinary business insurance coverage unless you bought a rider—to do their own work on the side. GPS telematics that monitors engine efficiency, braking systems, and tire pressure can ensure that each service vehicle gets all the scheduled and unscheduled maintenance for optimal operation.
GPS tracking can schedule service calls and non-billable activities in optimal order.
GPS isn’t just a red dot on a map. GPS tracking of your service vans out in the field simultaneously can help you send them on efficient routes. You can minimize miles traveled to work sites and add non-billable trips in between. With GPS tracking software from GPS Technologies, you schedule technicians in a way that allows them to travel the shortest routes from their homes to their first job and the shortest possible route from their last job back home. The system also keeps track of commuting miles you compensate for tax purposes, as needed.
You can use GPS tracking to reduce work pressures for your drivers.
Stressed-out technicians don’t make you the most money. You want your technicians to arrive at each job on time to maintain customer satisfaction, but you also want to eliminate unnecessary stress in getting there. You want your workers to concentrate more than you want them to hustle. Avoid repair errors that generate warranty costs by making driving between jobs easier.
GPS vehicle tracking systems for HVAC companies don’t just save you non-billable labor hours. They also save you money in more ways:
- GPS tracking systems enable you to reduce miles traveled, so you reduce fuel and maintenance expenses per job.
- GPS tracking systems can be integrated into your existing management systems to ensure every vehicle gets scheduled maintenance. Wiring GPS into dashboard diagnostics gives you the same “warning lights” displayed to your drivers. You can take corrective action before your driver has a breakdown on the road or in the field.
- GPS tracking systems can tell you when an operator opens the door to your vehicle, when the engine turns over, how long it’s warming up, and how long and where it idles. You can confirm work hours with GPS tracking, and you also have an objective record of billable hours (when an operator arrived at a work site, when they got out of the vehicle, and when they got back into the vehicle, confirming service hours). GPS tracking can help you head off billing disputes.
- GPS may save you money on both collision and comprehensive insurance. You can keep track of driver behaviors and take corrective action as necessary. This helps your techs avoid accidents and gives you a better record with your insurance company. And the ability of GPS to track stolen vehicles and equipment reduces insurance claims and lowers insurance rates.
GPS Technologies Has the Equipment, the Software, and the Experience You Need
There are hundreds of options in GPS tracking hardware for HVAC companies. GPS Technologies is familiar with them and can help you choose the best hardware for your company.
GPS tracking hardware generates massive amounts of data. GPS Technologies can help you integrate software that transforms enormous amounts of data into manageable information for executive decisions.
And GPS Technologies has experience in helping HVAC companies pump up their bottom life with good choices in GPS tracking equipment and software compatible with their existing dispatcher and accounting systems.
When you have questions, GPS Technologies has answers. We are here every weekday from 8 to 5. Contact us and call our main office at (847) 382-5107 for more information, or request a quote online today!
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