Tool Tracking: A Clear Way to Improve Operations (And Your Bottom Line)
You know what it’s like out there: each year, the complexity of construction work continues to increase while profit margins get thinner. That’s why so many contractors are looking for new ways to get organized, improve operations, and save money. Contractors of all sizes are beginning to recognize the same issue: tools. Specifically, losing or misplacing pricey tools (and repeatedly rebuying them). It’s a serious problem, but according to our tool tracking survey, 50% of contractors have given up tracking small tools and equipment at all.
But, why? Why is tool tracking not a business practice for so many contractors? Well, it helps to consider asset capitalization policies. A recent survey of 189 diverse contractors revealed that 85% of contractors capitalize starting at $1,000 – a level that excludes most power tools. So, it’s no surprise that an estimated 75% of contractors – or more – expense tools rather than including them in asset capitalization.
When tools aren’t listed as fixed assets, they are treated as consumables. Expensing tools once or twice is fine, but expensing them repeatedly as they go missing from the jobsite can truly affect thin profit margins on projects. This is especially important for smaller contractors where every dollar is critical. If you’re the guy looking at the numbers, you already know thousands of dollars are trickling away by not accounting for the smaller power tools that continuously vanish from your job-sites.
Losing, misplacing, and repeatedly buying expensive tools grossly impacts the effectiveness of your operations — and your bottom line.
So, what can you do? How do you improve operations and fix a leaky bottom line?
You FIX IT by getting organized and building accountability with a tool tracking solution that actually works.
Improve Operations: Get Organized with Tool Tracking Technology
Improve operations by getting organized with modern tool tracking software. This starts with compiling a current inventory including:
– all tools and equipment you own (You need to know what you have if you’re going to track it.)
– how long you’ve owned each item (This allows you to anticipate needed maintenance or replacement and to see if your equipment is lasting as long as it should.)
– where each item is right now (Current technology allows you to track tools even as they move in the field so you can find tools fast. This also helps you identify what tools are sitting idle and are available for use on other jobs.)
Improve Operations: Build Accountability with Tool Tracking Technology
Accountability is THE key to effective tool tracking. It’s been proven time and again: having a system that enables personnel to make and track tool transfers in the field places a more urgent sense of responsibility on field personnel. To improve operations, an effective tool tracking system has to:
- be mobile (Transfers have to be done in the field, without calling the office. Modern tool tracking software is deployable as an app on smartphones and tablets, making it easily accessible by field personnel.)
- be visible (Responsibility must be assigned to the person currently using a tool, and this person must be able to not only accept but also transfer the responsibility. You will reduce tool loss when everyone knows who is accountable for each tool.)
- benefit the field personnel using it (The right tool tracking solution makes transferring tools and their responsibility easier, equipping you and your field personnel with real-time access into the tool inventory at any given time.)
Most companies see more than a 20% drop in tool expenses after implementing a modern tool tracking system. Keeping an eye on your large investment in smaller tools — even those below the capitalization threshold — is a worthy endeavor. And, with the modern, effective technology available, the time has never been better.
To learn more about tool tracking technology that helps you improve operations by getting organized and building accountability, visit www.sharemytoolbox.com/tool-tracking
Click here to learn more about our mobile tool inventory app.
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If you liked this article check out “You don’t have to be James Bond to keep track of tools”.