For companies that rent out goods a simple software solution might seem sufficient. You need goods, a rental price, a rental period and a customer who would like to rent it from you. Not really complicated you might say. So with a simple piece of software you should be up and running quickly. However, in practice it turns out to be a bit more complex. Over the years I have noticed that there are much more challenges, especially in the industry I serve. A few examples:
Obviously, you cannot rent out more goods than you have available in your rental fleet. A decent understanding of what has been rented out, which rental contracts are about to start and which contracts are about to end is necessary in order to serve your customers well and to make commitments. Perhaps you will acknowledge the need to expand the rental fleet by temporarily hiring from third parties.
The pricing structures applied by rental companies are in itself not complex. A price per week or per month and an insurance charge of 8% do not seem to be complicated. However, it does get complicated when a customer rents something for a certain period of time, say one year, and you use a pricing structure with a four-weekly rate, for example. How do you deal with the last couple of days? And how do you deal with different rates within one period? And what if you use a combination of weekly and monthly rates and your customer wants to rent for four weeks?
The above also causes difficulties in your periodic invoicing process. Especially if, for example, the object you had rented out could not be used for a few days because of a defect. Or if you find out that you had charged an incorrect rental rate. This may lead to equally complicated credit notes.
Before and After Rental Service
Objects are often inspected prior to or after the rental period. This is required before renting them out again. With a small rental fleet this can easily be managed in Excel, but with a larger rental fleet you can no longer control this manually. Your service department will also aim to plan the Before & After Rental Service and easily monitor which objects will soon be rented out, or will be returning from rentals.
Renting out a machine is one thing, being able to easily see where the machine has been is a second. For certain machines it is also interesting to know their occupancy rate. If it is too low you might want to reconsider the added value of these machines for your rental fleet.
Just a few examples that cannot be managed with a simple piece of software. This requires more sophisticated software. If you want to know more about this, please feel free to contact me.
Peter Gerhardt is Senior Lead Consultant Logistics at Dysel and helps customers achieve maximum results with business software.