Bill Howe Plumbing, Heating & Air Conditioning is a $35 million company with three divisions and numerous jobs that involve complex projects.
Those might be new construction, or they might be reconstruction. They involve a project manager as well as subcontractors and in-house technicians assigned to jobs.
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“You’ll have a subcontractor for flooring, for technician, for tile, and then you’ll have the plumber that roughs in everything,” Jessica Groat, Chief Financial Officer of Bill Howe, said in a recent ServiceTitan interview. “So you’ve got multiple technicians, (and) multiple days (of work) spread across (the entire project).”
To say that billing and tracking are complex and cumbersome in that scenario would be an understatement.
That’s why Groat is happy the company switched to ServiceTitan in 2018, and was happier still to see the recent enhancements in ServiceTitan for projects that made the software more malleable for long-term jobs.
“It's nice to have a consolidated place,” Groat said.
ServiceTitan puts all the most important information in one place, which allows Groat to track billing, payments, discounts, and all the other myriad elements that go into projects.
“You don't want to go into each and every job and export them, or figure it out and add it all together,” Groat said. “That is not going to work. So it's really nice to see that (consolidation). The project manager can go to the project and see: How is this job tracking right now?”
A tangent to tracking projects is the ability to use progress billing, another benefit of ServiceTitan. Tracking expenses and income on multi-day jobs can make it difficult to ensure the cash flow is what it should be. Progress billing allows ServiceTitan users to bill at different points of the job, before completion, and adjust as the work continues.
A business like Bill Howe might bill for rough-in plumbing a few weeks before fixtures are installed, which allows it to keep up with expenses as the work continues. The approach is especially applicable to the Restoration and Flood Services division, which involves a lot of insurance work.
“I know that, from a construction standpoint, you can't just do ‘when you invoice is when the job is done,’” she said. “Because you have work spread across three months, but you only have your revenues in one month.
“It just doesn't work, because then you don't know how you're operating.”
With progress billing, Groat has a far better idea of where the project stands on an ongoing basis.
“I know it's silly, but it is as simple as having the invoices come over in a timely fashion and having it be at the invoice amount,” she said. “We know that we offer coupons. We know that we have refunds. We know that we have discounts and we have write-offs for bad debt. We know these things, but on a cash basis, you really have no clue because you're only getting the net.
“I was able to target the fact that we write on average $20,000 a month between discounts and coupons and write-offs. That is a significant number, right? But before we had no access to that number.
“And that's basic, because it's just at the invoice level. But it was startling to show that to the owners and be like, ‘We are absolutely a great company.’”
The Bill Howe family of companies was founded in the San Diego area in 1980. Bill Howe, Groat’s father, had worked as a plumber and then ran AM/PM Sewer and Drain in the late 1970s. Shortly after, he started his own plumbing business, running it from his apartment in Pacific Beach – with his father taking care of the books.
Groat’s mother, Tina, lived in the apartment below Bill. She initially took calls for the business, and eventually Bill and Tina married. Their five children grew up with the business; Groat remembers being dropped off at school by technicians using company trucks, and being “at 7 a.m. shop meetings with all the technicians, eating breakfast, as kids.”
The company added a Heating & Air Conditioning division in 2007, Restoration & Flood Services in 2009. After graduating in 2012 from Gonzaga University in Spokane, Wash., Groat decided she didn’t want to be in the family business – until she did.
“My parents knew that I was unhappy in the job that I was doing,” she said. “So they dangled the golden carrot: ‘We’ll give you a career path.’”
She joined, then went back to school for accounting and her CPA. She now handles the financial end of the business. She initially found, though, that the business was reporting on a cash basis, not accrual. Wages were reported at net, not gross, and there were no debt schedules or depreciation.
In short, the financial system needed upgrading.
“When ServiceTitan came around, it was a glorious thing to have accrual revenue and invoices come through our accounting system and have the foundation of a good profit-and-loss statement,” she said. “I've been spearheading projects, and I continue to spearhead projects because at our size -- with over $35 million in revenue between three corporate entities, three accounting softwares, one service type -- there's a lot of mapping. There's a lot of T’s to be crossed and I’s to be dotted with batching and accounting.”
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Groat is joined in the family business by two of her sisters, Hailey and Jamie. When Covid hit, the parents focused on taking care of the grandchildren, and the business slowly became the responsibility of a management team of five that includes the three sisters.
“My parents took an enormous step back from the business and watched all six of the grandkids,” Groat said. “They still come in for all the important meetings, but they leave the day-to-day decisions to us.”
At the time of the move to ServiceTitan, Bill Howe had been using JaRay, which ServiceTitan eventually bought.
“We were still on paper invoices, carbon copies, legal size, and for a shop that had probably 180 employees at the time, probably 60% of those being field employees, we just had a hard time growing and scaling,” Groat said. “So it was really fun to see ServiceTitan and see the bells and whistles and see the KPIs and the dashboards and everything that it could bring to the table, especially on the customer invoicing side and the presentation of it and the ease of billings and the ease of payments in the field and stuff like that. We were really excited about that.”
While she’s focused on the accounting and financial side, she sees the impact ServiceTitan has on other departments.
“Changes that ServiceTitan brings are amazing, but they will affect departments you didn't know that they affected,” she said. “(The software can) document how things affect each other, which is good because it brings transparency so that finance and accounting can help drive operations and not just be a back office.
“I think that is really important. And, side note, make sure your configurations are correct and up to date.”
A key benefit to ServiceTitan: the ability to scale, she said.
“The real-time nature of ServiceTitan,” Groat said, “has an ability to scale your business probably well beyond what you think you can scale to. It has an ability, it has a potential, which we like.”
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