Executive Insights

From leaders in Construction accounting.

Before purchasing equipment, it’s important to have technology in place that allows you to track the information needed to maximize the investment over time, specifically costs, revenue and utilization. Equipment costs fall into two categories: costs to own, such as depreciation and insurance, and costs to operate, which include fuel, maintenance and repairs. Equipment revenue is the internal rental rate charged to jobs. Utilization is the number of hours that a piece of equipment is used.

Although equipment tracking can be handled using makeshift spreadsheets, the ideal option is to use an equipment management system that integrates with your accounting program. Designated equipment management systems provide many benefits over less robust technology options. Features for tracking preventative maintenance schedules, generating associated work orders and automating tasks like recurrent billings are just a few examples. Most importantly, an equipment management system provides the detailed reporting and historical data needed to make informed business decisions that enhance the profitability of your fleet.

If you’re currently renting heavy equipment, it may be tempting to assume that ownership will save your company money. But without a systematic method for managing the complex variables associated with equipment, how will you determine whether an equipment purchase is a prudent capital expenditure?

Successful equipment management is similar to successful project management. Visibility into the day-to-day details is what allows you to control the final outcome. In either case, technology is key.