Are you still reeling from all the exorbitant price increases this fall, and wishing you had a better way to manage your company’s Purchasing & Inventory? ServiceTitan can help your service company get back on track with new efficiency features released in the past year, and even better functionality on the horizon for 2022.
But first, companies on ServiceTitan need to know how to use the Purchasing & Inventory modules to gain the most benefit.
“Purchasing & Inventory is one of those parts of ServiceTitan, when we look at our data of what’s being used and what’s not being used, this is a key area,” says ServiceTitan Co-Founder & President Vahe Kuzoyan. “There’s a large group of people who are not using it at all, and of those who are using it, they’re not using it to its full potential.”
Surprisingly, even folks like Tom Howard—who’s clearly tuned in to the capabilities of ServiceTitan in his role as the company’s Vice President of Customer Success & Experience—didn’t have the Purchasing & Inventory modules turned on for his own company, Lee’s Air in Fresno, Calif. Only 41% of ServiceTitan users currently do.
“Inventory! It’s like a four-letter word at my shop,” jokes Howard, who employs 115 in heating, air conditioning, and plumbing.
Howard says Lee’s Air escaped the price hikes caused by supply-chain issues for most of 2021—that is, until October when a major supplier’s contract came up for renewal.
“Bam! Prices went up. I have never seen prices increase so high and so fast,” Howard says. “Then the numbers came out in mid-November for October, and we had the worst October on record. Costs shot up sky-high. We lost hundreds of thousands of dollars over this.”
The biggest problem?
“We didn’t have Purchasing or Inventory set up,” Howard admits. “I just hated inventory and purchasing forever, and I realize now I’m at the point where I just have to have it. I should have had it a long time ago.”
In a recent ServiceTitan Product Roadmap webinar, Kuzoyan and Howard help to clear up some misconceptions about Purchasing & Inventory, and walk through some exciting new additions in the works. For instance, ServiceTitan’s Purchasing & Inventory can help companies:
Reduce operating costs through a centralized purchasing system to manage POs, returns, and bills across multiple warehouse locations.
Gain greater control and visibility into your inventory management and know where your stock level is at all times.
Manage inventory more efficiently in real-time with a mobile app for receiving POs, transfers, and inventory counts.
“We want to illustrate what’s possible today, especially in light of the most recent updates, and give you a sneak peek as to what’s coming next,” Kuzoyan adds.
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Clearing Up Misconceptions: Purchasing & Inventory Do Exist
Purchasing is a good fit for shops of all sizes.
Inventory is something you grow into after implementing Purchasing best practices, and hiring a full-time warehouse manager to oversee it.
You can use Purchasing without using Inventory, but not vice versa.
Your Pricebook does not have to be perfect to use Purchasing.
“There really is no reason not to do Purchasing (in ServiceTitan). I really want to drive that home,” Kuzoyan says. “To do Inventory well, it requires a lot of work. From our perspective, it requires a dedicated resource who is able to manage that whole flow. We think it makes sense for some contractors, but not all.”
Howard says Lee’s Air immediately started using the Purchasing module following the dismal October, even though it took his team a few weeks to adapt.
“What happens with Purchasing & Inventory is that, as you’re buying things, it’s creating a PO and it’s basically going in and updating ServiceTitan right away to your gross margins,” Howard says. “You can see what your gross margins are going to be as you go throughout the month.”
Companies that use the full functionality of Purchasing & Inventory find value by:
Gaining instant visibility into financials & KPIs.
Maintaining preferred stock levels.
Minimizing time needed to complete a job.
Achieving more accurate job costing.
Reducing shrinkage and preventing shortages.
Cutting costs associated with human error.
To use ServiceTitan Purchasing & Inventory, companies must first activate the Purchasing module, then Inventory can follow. A fully functioning Purchasing & Inventory workflow looks like the following:
Plan: Identify needs for upcoming jobs and identify sources.
Purchase: Send POs to vendors, negotiate discounts and terms.
Receive: Receive vendor shipments, verify accuracy, move to location.
Consume: Stage items to leave, install items, record utilization, manage returns.
Replenish: Calculate total consumption and restock needs.
Maintain: Ongoing review of stock, full counts, assess adjustments.
For Purchasing, it takes some time to set up and input all of your costs into ServiceTitan.
For Inventory, it’s best to dedicate a resource to oversee the entire process.
“Once it gets to the point where the value of having inventory exceeds the costs of adding the people to track the inventory, that’s probably the time to do it,” Howard says. “Or if you can buy in bulk, and the savings you gain from buying in bulk pays for the person you’ll need to manage this, then it might make sense to start doing inventory.
“Just decide if it’s worth it to you to have accurate balance sheets and more up-to-date financials, things like that,” he adds.
Purchasing & Inventory: Features Currently Available
Purchasing & Inventory is available to turn on for all ServiceTitan customers, as both are part of the basic software package and not an add-on service.
Using features currently available in Purchasing, companies benefit in the following areas:
Truck Replenishment: Prevent job delays by automatically tracking materials used and restocking as needed.
Create and Receive POs in Mobile: Save time and eliminate calls to the office by creating and/or receiving POs on a job.
PO Management: Save time and track your POs through their entire lifecycle.
Returns: Eliminate unusable items from inventory and expedite the returns process.
Bills & Receipts: Expedite reconciliation with a record of POs, bills, and receipts, while knowing who initiated them.
Reporting: Gain meaningful business insights with comprehensive purchasing KPIs and custom reporting.
“Bills & Receipts are huge,” Howard says. “It changed the game for me to be able to see what the gross margins are throughout the month.”
Using features currently available in Inventory, companies benefit in the following areas:
Inventory Tracking: Ensure upcoming jobs run smoothly and increase accountability against shrinkage and other losses.
Inventory Templates: Maintain inventory levels and automatically trigger replenishment based on consumption.
Bin Tracking: Efficiently process inventory location activities, expedite turnaround times, and lower inventory write-offs.
Serialized Inventory: Accurately track inventory sold to customers or purchased from vendors.
Techs & Sales
Requisitions: Reduce delays, plan for future jobs, and reserve or order materials and equipment as needed.
Recently released features in the past year include:
Weighted Average Costing: Calculate an item’s weighted average cost based on purchasing behavior to know your inventory value worth.
Requisitions without Estimates: Requisitions no longer need a “sold estimate” to be created.
Receive Items Not in a PO: Receive items not on a PO when items are subbed out by the vendor.
Rollover Backordered Items: Rollover backordered items to a new purchase order.
Items Replenished After Job Start Date: Prevent restocking parts before jobs actually happen and carrying more inventory than desired.
Costing Precision: Add up to 10 digits to decimals to equipment and materials.
Purchasing & Inventory: Roadmap for 2022
Here’s a sneak peek into what’s coming soon for 2022.
Inventory Counts—Currently in Beta; General Availability Q2
Reduce the time needed to create and complete accurate inventory counts and ensure accurate inventory levels.
Create and schedule weekly, monthly, quarterly, bi-annual, and annual inventory counts.
Identify stock items you want to count, based on volume, value, or both.
Automatically create adjustments based on approved counts to update inventory levels based on the completed counts.
Works with mobile.
Master Parts List—Currently in Beta; General Availability Q2
Gain access to real-time inventory insights without having to run reports or rely on external systems to get information.
Review both inventory stock levels globally and at individual inventory locations for individual items.
Review item purchasing insights, inventory item costs and valuation, serial number insights and current location, and transaction information for individual items—all with a single source in ServiceTitan.
Units of Measures—Currently in Beta; General Availability Q2
Items can be ordered at one Unit of Measurement and consumed at a different Unit of Measurement.
Reduce vendor confusion when placing orders.
Eliminate the need for multiple part numbers to maintain accurate stock levels.
Define multiple ordering and consumption units of measurement.
Howard says this one is a big deal, especially for contractors who may buy certain parts in bulk, but only use a small portion on each job. Without this feature, he says, it’s like using one screw on a job, but saying you used a whole bucket of screws.
Inventory App—Currently in Limited Beta; General Availability Q3
Manage inventory more efficiently on the spot and in real-time with a mobile app for receiving purchase orders, transfers, and inventory counts.
Receiving: Streamline the process to receive stock into inventory as close to real-time as possible.
Transfers: Accurately complete pulling material for replenishment and requisitions.
Counts: Perform accurate counts to help prevent shrinkage and shortages, and maintain accurate financials.
“You’ll be able to have your warehouse manager go out, walk around the warehouse, and start doing their counts right in this app,” Howard says.
Barcode Scanning—Currently in Development; General Availability Q4 (considered a “fast-follow” to the Inventory App)
Achieve greater accuracy and efficiency when picking items for inventory transactions by scanning barcodes.
Associate multiple barcodes with a single Pricebook item.
Scan item barcodes within the Technician and Inventory mobile apps.
Scan to select an item without searching through the Pricebook.
Increased accuracy from scanning items leads to fewer errors in transaction data.
Easier training for new employees who may not be familiar with items.
Kuzoyan says the Inventory App is one of several ServiceTitan is currently working on.
“The apps are going to be native apps. This is important from a performance perspective,” Kuzoyan says. “These are the types of apps that are best performing, the speediest, they react the fastest. We’ve invested a lot in making sure that not just the features are rich and give you what you need, but they’re also high-performing.”
Build Purchasing Foundation First, then Grow into Inventory
Kuzoyan and Howard reiterate that it's best to build a strong foundation in Purchasing before adding Inventory, as the process goes much smoother. It’s also important to ask all of your vendors for master SKU lists and upload them into your Pricebook.
At Lee’s Air, Howard says he first rolled out Purchasing in his HVAC department, starting with service and then adding installations. His plumbing service and install teams came next, and then he mandated the entire company to use Purchasing.
“I told everyone, ‘You’re not getting parts unless you order it from here!’ Once everyone was forced to be on it, then it really took off and started rolling,” he says.
Not using Purchasing?
Sign up for training: Learn how to begin utilizing the Purchasing module with best practices.
Put in the time: Nominate someone on your team to dedicate the time.
Contact your Customer Success Manager: Have your CSM check your account to ensure settings are enabled.
Sign up for training: Ensure you’re using Purchasing features to their fullest potential.
Build the Pricebook: Ensure your Pricebook includes all commonly used terms, which allows them to be used in Purchasing.
Focus on growth: The need for a warehouse manager will come naturally. This stage of growth typically happens anywhere between 20 to 50 techs, depending on the organization.
Sign up for training: Ensure you’re using Inventory to its fullest potential.
Give us feedback: Fill out our survey, participate in our betas.