Sticking to a budget, improving financial performance, and controlling costs are core to smart facilities maintenance operations. However, it's usually more theory than practice. What steps can companies take to improve their FM budget control?

Managing billing, invoicing, and payments for facilities work across multiple locations requires handling hundreds of invoices every month from multiple vendors with their own submission, payment, and contractual requirements. Yet, with the average cost to process an invoice anywhere between $15 and $40, many companies continue to use outdated processes and strategies that continue to inflate these numbers, lead to poor cost controls, and contribute to a lack of budget visibility across locations.

Companies looking to gain better insights and controls--especially multisite retail and restaurant locations--can enact a few changes within their existing processes without having to invest heavily in personnel or technology. By streamlining the intake and review process, eliminating incorrect and duplicate payments, and promoting greater efficiency and cost savings throughout a facilities program, companies can refine their maintenance processes while implementing greater cost controls that allow for more capital investment.

Streamline the intake of invoices

When intaking invoices from vendors, look to create a more streamlined, standardized process that minimizes variability. This can be done in a few way:

  • Communicate invoice requirements with facilities vendors.
  • Create a set of uniform invoice intake and processing requirements that make sense for the accounting department.
  • Record the name and relevant employee information of the technician who performed the work on site.
  • Create a work order invoice intake form.

Implementing these steps standardizes the record of the work performed across locations and any associated financial responsibilities. This makes it easy to clearly identify the vendor, the purchase order, the purchase order and invoice number, the exact description of the work performed and the make, model, and serial number of the equipment affected. As information is collected and analyzed, data patterns should emerge to better optimize performance and spend over time.

Streamlining the invoice intake process can help avoid overdue and duplicate invoice payments. By configuring the work order management system to send periodic alerts for upcoming vendor invoices, the system can help ensure that invoices with identical invoice or purchase order numbers are not processed more than once.

Identify outlier invoices

After establishing a standardized invoice intake sequence and relevant protocols, it’s critical to sort invoice data such that outliers—most often understood as either very low or very high dollar invoices—can be easily identified and handled. An outlier invoice, whether high- or low-dollar, can strain accounting teams, especially if it’s not discovered for a long time after its issue date.

Discovering the true source of an accounting mistake of this sort can require hours researching the originally quoted dollar amount, validating the amount with vendor companies, getting invoice credits validated and processed, and going through the process of processing, validating, and paying out the subsequent corrected invoice. Given the number of personnel hours involved in resolving these issues, a manual review can be quite expensive. But with an automatic check against predefined invoice thresholds, an organization can save time and resources by addressing these problems at the outset.

Identify sources of not-to-exceed (NTE) threshold abuse

NTE values serve as an automatic cost control for facilities work orders. These dollar thresholds are based on an historical analysis of acceptable dollar amount ranges for any given kind of work order; if any work order happens to exceed the NTE threshold, vendors are required by the terms of their contract to contact a facilities decision maker to approve the additional costs.

However, given the threshold limits, facilities managers sometimes do not notice that problematic vendors have begun creating invoices that habitually approach the NTE limit. Since these work order invoices do not trigger a review, the excess charges can easily go unnoticed. This is especially the case with large companies with thousands of locations.

It's important to impose checks to determine if NTE abuse is a factor within a facilities management program. A work order management system can be configured to automatically review the trending average cost of work order values over time; as these values approach the NTE limit, the system can provide alerts to any changes and trigger a review and a possible invoice dispute.

Actively manage insurance claims

For multisite companies, insurance claims are a fact of doing business. Retailers, restaurants, and similar companies routinely contend with customers filing insurance claims against them, such as for failing to properly manage the accumulation of snow and ice outside their stores. And as more locations are added, the number of insurance claims filed will likely also increase.

This is where a well-documented facilities maintenance program can serve as an important insurance counterclaim. As these claims emerge, a facilities management program with a streamlined and standardized work order management systems can be used to dispute potential claims. For example, if a customer made a slip-and-fall claim but the WO management system had documented and visual proof to refute the claim, this can help protect a company's assets and overall reputation.

Leveraging work order data—and even adjacent environmental data, such as weather information around the area and time of the relevant claim—is a productive path toward claims resolution. This information may show that a company and its branch managers did everything within reason to protect customers, associates, and the community at large against slip-and-fall injuries resulting from snow and ice buildup.

Implement accrual management and capital planning strategies

Tracking accrual data, which are revenue earned or expenses incurred, helps companies have a clearer picture of their overall spending habits and budgetary needs. Rather than merely tracking the invoices that are processed and paid against specific fiscal periods, tracking facilities accrual data will help to plan for future maintenance needs by presenting raw expenditure values.

Accrual tracking also encourages routine asset upkeep and capital expenditures related to the cost of new assets, raw materials costs for brand refreshes, and related long-term projects. Tracking the rate of spending accrual for facilities asset maintenance will help generate a strategic plan for asset replacement to avoid overspending on asset maintenance when the better long-term solution is to invest in new equipment.

Accrual information will serve as a valuable source of strategic leverage as business needs change with shifting priorities, corporate expansion initiatives, and as unexpected conditions arise. A clear picture of historical maintenance accrual patterns will help accounting department present a more compelling need for additional funds to corporate decision makers, who may not be aware of the variety of ways in which facilities program impacts broader organizational decision making.

SMS Assist

Developing a mature strategic approach to managing billing and reconciliation throughout a facilities program requires a sizable investment in time, resources, and human capital. This can be a complex undertaking, involving the interplay of lots of different skill roles, technical assets, business processes, and technology platforms—all of which demand their own individualized attention if they’re to work successfully together as a dynamic unit.

At SMS Assist, we’ve made the complexities of facilities billing and finance a core aspect of our business—it’s part of how we’re able to manage more than 2.5 million work orders every year. We deliver instant access to our in-house teams of billing and finance professionals, dedicated subject matter and operations experts, along with our network of more than 30,000 vetted, qualified vendors ready for work in more than 55 trades. More than 220,000 locations trust us with the spaces they depend on every day to better serve their customers and communities.

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