Setting up for success

Welcome to ServiceTitan’s Commercial Playbook—an aggregation of best practices from across the industry, written purposely for your Commercial business. In this playbook, you’ll learn all the key tips and tricks (what we call “best practices”) needed to take your business to the next level.


Services and Departments

Regardless of how you classify your company’s customer focus, you must clearly delineate the business internally in a way that maximizes revenue, decreases costs, and provides the best customer experience. ServiceTitan provides this functionality via what we call “Business Units,” really just an internal division or department within your company. 

For this Playbook, we’ll call this process “departmentalization.”

Why is breaking your business into Business Units so important? What kind of information is more useful within Business Units than it would be without them?

“The ability to segment your business into Business Units or departments allows you to focus and nurture specific areas where you want to grow or improve,” Gonzales said. “If we had all of plumbing just under one heading, including residential and commercial, we would not get to see which technicians are the best in that commercial application, because it requires a different set of skills.

“When you are able to separate the Job Types within those Business Units, you're able to separate and assign technicians, so that way they really get to shine in their field.”

Gonzales gives the example of her commercial plumbers also being able to do drains, but that not necessarily being the case with residential plumbers.

But that’s not the only benefit. 

“Business Units will also let you know when you need to add more people to the payroll, or if you need to do a price increase or price adjustment in a specific department,” she said. “You'll be able to track the margins better, be able to track your overhead better, to make sure that you're getting enough to the bottom line for the future.”

Gonzales says it’s like fishing. 

“We have different lures and everything else, and different types of bait,” she said. “A Business Unit is classifying your fishes and making sure you have the right bait, and the right hooks, and the right lures.”

Departmentalization, Business Units, & Job Types

Single-Trade Businesses

Whether your business is predominantly Commercial or Residential, departmentalizing your financial statements is an absolute must. In ServiceTitan, this is easily accomplished by using Business Units (BUs), a key piece of our functionality that unlocks insights and reporting capability. Business Units are used to track performance at a granular level, in this case a department, such as “ HVAC Maintenance—Commercial” or “ HVAC Install—Commercial.”  

We recommend creating a  Business Unit for each Department. Even if your company is a single-trade business,  Departments help bring clarity to the business, enabling you to effectively drive performance on the revenue and cost side. 

For instance, an HVAC-only company using ServiceTitan would typically have 4 departments:

  • Sales, for your Comfort Advisors / Salespeople

  • Install, for the installation of new units

  • Maintenance, for annual maintenance visits or preventative maintenance work

  • Service, for diagnostics, repairs, troubleshooting, etc. 

Multi-Trade Businesses

If your business is multi-trade, we strongly recommend creating a Business Unit for each department within  each trade.  For example, a company that does Residential HVAC and Plumbing, with a Commercial HVAC department would use the the following Business Units:  

  • Residential HVAC Business Units: HVAC Sales Residential, HVAC Install Residential, HVAC Maintenance Residential, HVAC Service Residential

  • Residential Plumbing Business Units: Plumbing Sales Residential, Plumbing Install Residential, Plumbing Drains Residential, Plumbing Service Residential

  • Commercial HVAC Business Units: HVAC Sales Commercial, HVAC Install Commercial, HVAC Maintenance Commercial, HVAC Service Commercial

Given the interconnected nature of ServiceTitan with your chosen accounting software (we recommend QuickBooks), it’s crucial that these BUs match what you’re using in your accounting software for true end-to-end visibility.  

In QuickBooks, Business Units are called classes.  Invoices should be properly exported to the corresponding classes in QuickBooks so you can get accurate, departmentalized reporting. This provides you with the ability to run a Profit and Loss statement per department, which can improve the quality of decision-making in your business. 

If your business is losing money in a particular month or quarter, you should be able to open up your financial statements and quickly find the departments that are underperforming. With this level of insight, you can focus on fixing the underperforming department(s), instead of spending that time trying to find the problem. 

Furthermore, you can juice the parts of the business that are working well, while you iron out the kinks in the underperforming department(s). 

ServiceTitan allows you to see these trends on a daily, weekly, monthly, quarterly, and annual basis. 

When you log in, your landing page is a dashboard giving you a snapshot of how your business is doing. Think of it as your “go-to hub.” You can also schedule reports to come to your email every day or deep dive into ongoing jobs with job costing. Having this powerful tool allows you to correct your course quickly and keep jobs on track.

As a rule of thumb: when a portion of your business is  or will become greater than 10% of your company’s  overall revenue, it’s a good idea to departmentalize and make this its own Business Unit.  

We don’t recommend separating services such as “Heating Calls” and “Cooling Calls” into their own BUs.  This isn’t typically required at the Business Unit level because you can still get reporting that divides calls by service provided, using ServiceTitan’s Job Type functionality—essentially sub-categories within each BU. 

Job Types

Business Units and Job Types are the two most important drivers of reporting within ServiceTitan. They are the keys to unlocking that next level of insights that only ServiceTitan can provide your business. 

Spend time to configure these appropriately up front. The way BUs and Job Types are set up within ServiceTitan for your business will have major downstream effects on your ability to track KPIs and business performance (and therefore your ability to take action within the business). 

Using Job Type allows Albuquerque Plumbing and HVAC to prioritize the calls for customers, to mitigate the biggest impact on customers’ business. 

“Then we get to come in with a cape on, save the day, they're happy, and they'll be a repeat customer,” Gonzales said. “And that started at the Job Type.”

Job Types help inexperienced dispatchers and CSRs too. Gonzales uses the example of an incoming call about a broken walk-in. 

“That CSR, that dispatcher, has no idea what a walk-in is,” she said. “They're new, they're learning, so they might put no-cool, and the customer is losing inventory. So for a restaurant, having their walk-in freezer down, they lose inventory, which means they're losing money, which means they're already in a negative for the day.

“Job Typers help the techs know exactly how quickly they need to get things done. Certain Job Typers, if you don't get a technician out there, they have to shut down their restaurant or their business. We've had flooding in dentist's offices, and if we didn't have the appropriate Job Type, they could have been pushed to the next day. 

“It's one of those strategic things that help the dispatcher and the tech take care of the customers.”

Here are some examples of common Job Types for a Commercial HVAC Business Unit that does Install  (BU: “HVAC Install Commercial”):

  • No Cooling

  • Chiller Diagnostic 

  • Packaged Unit Repair

  • Coil Cleaning

  • RTU Diagnostic/Troubleshooting

  • Not maintain temperature

  • Compressor Repair

  • Leak Locate

So what do Business Units and Job Types look like in action? When an existing customer of yours calls in a panic in the middle of the summer because their AC has stopped blowing cold air throughout their restaurant, one of your CSRs may quickly select the HVAC Service Commercial business unit and within that, book the job type as “No Cooling.” You can now use this granular level of information to find and dispatch the right technician with the right level of urgency based on the customer who called in and the issue they are experiencing. 

ServiceTitan mandates that both Business Units and Job Types be chosen at the time of booking a call, enabling the level of insights and actions you will need to take your business to the next level. This information becomes critical because it affects not only your reporting, but also so many other operational parts of the business.  

For instance, ServiceTitan tracks the time a technician spends on a job.  Since ServiceTitan knows the Business Unit of the call, it can automatically attribute the time charged for the job to that BU. This saves countless hours that would be needed to reconcile time spent on each job as an input into overall job profitability.

ServiceTitan Pro tip: A single Job Type can work with multiple business units.  For instance, you may have a Job Type called “Warranty,” which could be selected under either Plumbing Service Residential, HVAC Service Commercial or a number of other Business Units. 

Job Types also reduce the number of overall Business Units to track. Ultimately, companies can run reports to gain  insights from all over the business using BUs and Job Types.

Why does departmentalization matter?

For businesses in the trades, departmentalization is critical to the growth and sustained management of the company, specifically when you start hiring individual department managers.  

For instance, if you are a plumbing contractor with an install department that focuses on sewer line replacements and  the installation of water heaters, you may want to hire a specific install manager for this department. Incentivizing that manager based on the metrics and outcomes they can control (either partially or entirely will drive accountability AND ensure that your manager is focused on the outcomes that you value most as a business owner.  

In the case of a plumbing manager, that metric would likely be the gross margin of the plumbing department. For a sales department, a sales manager may be incentivized by the close rate and average ticket of the department. ServiceTitan, with Business Units and Job Types set up properly,  provides the easiest way to report these numbers, set goals against them, and hold your team accountable to those goals. 

And, when BUs and Job Types are set up properly, getting to those numbers is a pretty simple task. The process is the same for starting a commercial business from scratch or augmenting your current residential business with  commercial work. 

Why does this kind of departmentalization matter in a commercial setting? 

“It matters because it helps make sure the right tech is sent to the right job,” Gonzales said. “For instance, a technician who can work on an air conditioner in a smaller business doesn't always know how to do low-temperature refrigeration. 

“You're going to need to have it departmentalized so you don't send somebody who doesn't have the proper tools and the proper education to be able to take care of the problem. The last thing you want to do, especially with a commercial customer, is to not solve the problem the first time. It makes you look like you don't know what you're doing.”

A commercial case study

Gonzales, Co-Owner and Co-Founder at Albuquerque Plumbing, Heating & Cooling Inc, learned some lessons when adding commercial units to the business. 

At first, they tried mirroring the residential side as much as possible. That didn’t work. 

“Ultimately, we realized our commercial customers had different needs than our residential customers,” she said.  

That led to new Business Units, such as Fire Protection, Kitchen Equipment and, later, Low-Temp Refrigeration. 

“Once we had our new Business Units established, managers who could build their departments from the ground up, setting appropriate goals for key metrics that mattered most to their division, their Business Units, and their Job Types and ultimately driving the business to that next level.”

She also separated the dispatchers for the residential and commercial divisions, after realizing that commercial customers required much more in-office action compared to the residential business.  In residential, field technicians performed some key job-related tasks, such as creating estimates, taking pictures or videos, creating site maps and locating parts/equipment.

Albuquerque Plumbing, Heating & Cooling has been using ServiceTitan to run their commercial business for four years. 

“The first year we saw a 33% increase in revenue to our two core commercial departments,” Gonzales said. “In 2018, those departments brought in $2.98 million. In 2019, the same departments brought in $3.95 million. 

“I truly believe the main reason this was possible is the level of insights and actions from our reporting, powered by ServiceTitan,” she said. 

Business Unit Best Practices

Restrict Job Types to certain Business Units

As we mentioned above, you can assign Job Types to multiple Business Units, which helps cut down redundancy of Job Types and provides unique cuts of reporting for your business. 

In your Job Type settings, you should assign Job Types only to the Business Units that apply to the job type (e.g. set all install Job Types only to your Install Business Units).   This will help prevent CSRs from booking jobs under the incorrect business unit (e.g. booking an Estimate Job under a Service Business Unit).

Things to Know 

Your BU settings are also used to automate tasks and streamline workflows, allowing you to use ServiceTitan to eliminate as many manual steps as possible. 

For example, if your installation BU uses a different authorization agreement from your maintenance BU, you can upload separate agreements for each BU so that your technicians always use the correct one. This simple action saves countless hours correcting errors in the back office and makes your technicians quicker and more efficient in the field. 

If you want to take your knowledge of Business Units to the next level, review these Knowledge Base articles on how to properly  set up and use Business Units in ServiceTitan:

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