All Industries, Webinar Recap, Management, Operations, Business Tips

How to Drive Business Growth with Effective Financial Reporting in ServiceTitan

Diana Lamirand
May 4th, 2023
10 Min Read

When digging into your business financial information, do the numbers make sense and point you in the right direction to grow profits and your business? Or do you experience “analysis paralysis” from all the different numbers that just turn into gibberish on a spreadsheet and give you no clarity on what steps to take next?

To help you make sense of it all, Business Coach Jason Arthur, owner of Eighty-Seven Degrees Coaching and a ServiceTitan Certified Partner, walks through a step-by-step approach to using your ServiceTitan financial reports more effectively and operating your business more consistently in a recent webinar.

“My business goal is to help companies in the trades identify growth and reporting opportunities, and how to scale what I call ‘brick walls in their business.’ And a lot of that focuses and circles around ServiceTitan,” says Arthur, who also worked in the HVAC industry for nearly 20 years.

In this webinar recap, Arthur explains:

  • How to use your budget to track monthly, quarterly, and annual progress

  • How to use reports to monitor your actuals to budgets and make data-driven decisions

  • How to use reports to identify changes needed to improve operations

  • Closing the loop on effective financial reporting

  • Rinse and repeat

“Rather than just knowing that something's not going right, we're going to work to identify what exactly is not going right,” Arthur says. “Is it a business unit issue? Is it a department issue? Is it an employee issue? Or is it a lack of technical training or knowledge or just following the process and procedures?”

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Using your budget to track monthly, quarterly, and annual progress

First off, be sure to create an annual budget that details your goals for the upcoming year. It should include not only your company’s revenue goals, but also plans for operational changes. What infrastructure support do you need? What management support do you need? What changes do you need to make in the company to attain that budget? 

With your annual budget in hand, follow these 3 steps to track progress:

Step #1: Upload your annual budget by business unit into ServiceTitan

Upload your annual budget into your ServiceTitan dashboard, and apply it to each business unit (e.g., HVAC service, HVAC installation, or HVAC sales). Then break down each business unit by month, and then by a daily goal for each month. Arthur suggests checking and changing this daily goal each month based on accurate reporting and tracking through ServiceTitan.

“Every month, you'd go into your business unit, you'd reset what that daily goal should be. That way, as the month goes on, it's accurate reporting and tracking for that month, not for the year,” Arthur explains. 

Once you have a monthly budget broken down by business unit, you can decide whether to divide by the total number of days in the month (if you operate on weekends) or by the total number of business days (20) in the month to set the daily goal. 

“Every service industry has some very big ebbs and flows,” Arthur adds. “You're going to have your shoulder seasons, then you're going to have seasons where you're really making money. To have an average throughout the year isn't going to give you as accurate of reporting.”

Step #2: Create tracking reports in ServiceTitan to monitor progress

To really understand your company’s financial outlook in any given year or month, you first need to set up a few different reports in ServiceTitan, Arthur says. 

He suggests starting with at least the following four reports:

  • Business Unit Performance 

  • Technician Performance

  • Inbound Call or Call Center Performance

  • Marketing Campaigns Performance

“You should create the report to monitor the performance of each business unit compared to your budget or revenue goal,” Arthur says. Then schedule the report for automatic delivery to the leaders in your company so they can more consistently track and monitor progress.

“Business gets in the way at times and you can forget about running that report, looking at your dashboard, or keeping your eye on the ball. Doing this and scheduling those reports is going to make that easier for us,” he says.

Step #3: Review tracking reports for areas of opportunity

The final step involves actually reviewing those performance reports to identify action items that need to be addressed.

“This isn't the time for high fives, but it's to be sure we’re tracking well on our budget,” Arthur says. “We want to identify the things that need work and allow areas of opportunity to pop out. You can high-five about how well Joe did in sales later on. Right now, these reports are intended to identify what needs attention.”

How to use reports to monitor your actuals to budgets and make data-driven decisions

In the webinar, Arthur walked through each step above by showing examples of how a service company might set up their daily and monthly budget goals by business unit.

“You want to load your monthly budget into each business unit at the beginning of each month,” Arthur advises for Step #1. “That way, your reports that come out throughout the month, they're comparing your actuals to the budget that you input into your business unit.”

For instance, your HVAC install department might have a $100,000 monthly budget that’s broken down by 20 business days in a month (no weekends). Here, your daily revenue goal would be $5,000. 

“You either input it as total days in the month or the number of business days in that month. But whichever way you go, make sure you're consistent month in and month out and on each business unit,” Arthur says.

For Step #2, start by using Business Units as a report type and Business Unit Performance as the template.  

“What I always recommend, especially if you're new to reporting and tracking your budget-to-actual, is to start with less,” Arthur says. “You’ll get really excited and want to enter 15 or 20 different things. However, when you start getting those reports, you're going to get overwhelmed… ‘paralysis by analysis’ type of thing. You're not going to know what to do with it. So start simple.”

To review revenue compared to budget and actuals, Arthur filtered the report to show only:

  • Number of completed jobs

  • How much completed revenue

  • Gross margin dollar

  • Gross margin percent

  • Daily goal or daily business goal

When scheduling reports, Arthur uses a “flexible report” to access more options, names the report so it’s easy to identify, and chooses whether to attach the report as a PDF or Excel file. Use an Excel file if the recipients need to modify the report, or a PDF for no modifications. Then you select your date range for report delivery and the recipients.

“This is something that I would monitor weekly,” Arthur says. “Let's say you have a team meeting every Thursday. Then I would recommend doing it on Tuesday or Wednesday. So that way, it's the most up-to-date information possible.”

When reviewing the reports in Step #3, you may find some areas of opportunity as well as some numbers that don’t make sense because they don’t fall within your budget range. 

In that case, it's not necessarily that your company is underperforming or your pricing isn’t right. Rather, it’s because the information wasn’t put into the system correctly.

How to use reports to identify changes needed to improve operations

“Once we see a business unit where there's an issue, then we can dive into some more detail within that business unit itself,” Arthur says.

In his Business Unit Performance report example, Arthur compared the total revenue goal for his HVAC service department along with maintenance and tune-ups, and finally HVAC replacements (installations). For the first two, the budget-to-actuals fell within range. For replacements, however, he discovered a $4,500 deficit.

“That would be one that I would certainly look into. As a percentage, that's a big drop. As a dollar amount, that's probably one job. But if that continues, then we're going to be off by $15,000 or so by the end of the month, which could be a tough one to cover depending on your volume,” Arthur explains.

After reviewing the numbers for gross margin dollar, gross margin percent, total job average, and billable efficiency, Arthur decided those numbers weren’t too terribly off.

“So what this would tell me at first glance is that it's probably not a pricing issue. It's probably not a really bad technician issue, like discounting too much, not doing the right price, or not being efficient with their time. It's probably just a ‘number of calls’ issue,” he says.

You can then drill down into your Call Center Performance report to determine the problem. Do you see a large number of abandoned calls? Is there something broken in the system? Do you have a new CSR who doesn't fully know the process?

You can also review your Marketing Campaigns Performance report to see how many calls came in, how many jobs were booked, and how much revenue was earned from each campaign. 

“Are we getting less traction? Are we getting less clicks? Or is our marketing spin the same? And then if that all bears out, then it's digging into other external factors. Is the temperature not set right? Is there a new player in town who is taking up a market share? What exactly is going on?” Arthur says.

Closing the loop on effective financial reporting

Your ServiceTitan reports can help you find a financial issue, identify its cause, and determine what you need to do to fix it. 

Let's say in this case, you have a technician whose gross profit is low, and you find out it’s because they're giving customers too many discounts. That’s when you set up a coaching session with the technician to emphasize the need to follow your company’s set prices in your pricebook because his actions hurt the company’s overall profitability.

“But how do we ensure the cause is fixed and it stays fixed? That's the ‘closing the loop’ part,” Arthur says. “It's not enough to have that one conversation and assume that everything's good and not bring it up again. In two weeks, 30 days, 60 days, or 90 days, that issue's going to unfix itself and you're going to have the same problem over again down the road.”

What changes in the operation, the pricing, or your structure need to be implemented to make sure that loop stays closed? How are you going to monitor moving forward to ensure those processes were changed effectively and the loop remains closed?

“For anything that affects your profitability, essentially, you need at least 90 days of monitoring afterward,” Arthur says. “Everybody knows the importance of it, the effects of it, and then it's monitored for at least the next 90 days.”

Rinse and repeat

“This isn't a one-time thing. This is a process that needs to become part of your weekly and monthly tasks,” Arthur says.

In fact, the business coach thinks consistent monitoring of business reports is as important as anything else you do in your business, including payroll, paying vendors, running calls for customers, or simply opening the doors every day.

“If you don't do these things, if you don't take the time to identify how your company's running, to review the reports, to create a budget, to fix the issues that you identify, then it's only going to be a matter of time when you're not open anymore or you're not making the amount of money that you should be making.

“So, rinse and repeat. Make this part of your daily, weekly, and monthly tasks,” he adds. 

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