Imagine you are a private landowner or a property developer, and you find yourself needing to clear earth, or dig the pit where foundations will go. A mechanical digger will do in one afternoon what would take a week with a shovel or spade. So you rent one and you can safely assume it will come with a scoop.
But what if you need to break through limestone 90 cm below the surface? What if you want to use the digger to lay electrical lines under ground without digging up an entire trench? For that you need specialist heads. Those heads will not be your main rental item: that’s the digger. You will not need them for the entire duration, and having a system that allows these to be billed separately from the main rental asset means they can be collected and returned independently of the actual digger.
This is good news for the rental company who may have others waiting for that equipment, as well as the customer who may not want loads of equipment around they no longer have a use for.
Managing the little things avoids big headaches
For the rental company, the money-making asset, the bit of kit that allows them to stay afloat, is the digger. Not the cable laying head, and not the jack hammer. No one will contact a rental company asking to only rent either of those, and then ask if they can throw in an excavator for good measure.
But those smaller items do add up. They need to be bought. They need to be stored, transported, and maybe cleaned, etc. So, they do need to be tracked, even if their depreciation has little impact on the general ledger, and they don’t need much in the way of preventative maintenance.
So, how to manage them?
What Shepherd allows rental companies to do is to treat these accessories independently of the asset they are associated with, which is doing the heavy-lifting of the revenue activities. And because these accessories don’t have the same ownership costs, nor depreciation, being able to track them this way will not muddy the waters of costs vs revenue.
There are additional advantages. Despite being on the same invoice and despite being rented out with the asset, they can now be treated independently. Let’s imagine this time something a bit more specialist than a construction site digger. Let’s picture a cryogenic storage unit as the asset, and different components, trays, and chemical products (e.g., liquid nitrogen) as the accessories.
The cryotank is rented out for a six-month academic project. The project includes producing and storing samples. That means storage materials suitable to those conditions, it may mean monitoring alarms, and certainly requires calibration equipment.
So that means that once the calibration is done, the equipment needed will be sitting around unused until the next schedule check. That’s a waste of rental cost for the customer, they won’t be happy about and a small but expensive piece of equipment the rental firm can’t hand out to another in the queue, meaning another unmet customer need.
With Shepherd’s new approach to handling accessories, the tanks can remain on site for that half-year, as planned, but the calibrator can go back once it’s no longer being used. You could argue that this could have happened regardless: there’s nothing stopping the rental or customer company from returning it to the depot. But how can you track and redistribute it if the invoice it is tied to remains open for another 26 weeks, and it is only needed every 4 between uses?
That pretty much illustrates the beauty of this system. With this ability to extricate the accessory from the main rental invoice, neither the asset nor the accessory becomes a rate-limiting step in terms of revenue for the rental firm, nor a cost multiplier for the end user.
You can now get the flexibility that simply makes it easier to keep customers that bit happier, without it costing you, the rental company, in administration costs, or missed opportunities with other clients waiting for your service. Sounds like a nice edge? Booking a demo is the next step.
