If the distinctive features of service companies operating on a job order basis are underestimated, this will hinder strategic business planning and adequate performance control.
- Staff first. Human resources are the true heart of a company and therefore, managing their time is a key factor. Therefore, managing the planning and reporting of hours worked, as well as all the legislative and contractual obligations relating to these resources, is a matter of paramount importance.
- Furthermore, in this type of business, the “corporate zone” goes far beyond the four walls of the plant. Work takes place not only at the headquarters but also “on the move”. And mobility is a concept that implies monitoring difficulties and lack of communication. Therefore, mobile technologies should be adopted to improve communication processes.
- Companies that work on a job order basis are networks that need a great degree of resource flexibility. In fact, to deal with the variable workloads, they often resort to external professionals. Therefore, integrated planning and management should be ensured.
- Another key factor is the ability to obtain a prior and non-repetitive assessment of costs. Undertakings providing services sign mainly lump-sum contracts, a type of agreement that often conceals snares in profit margins. The non-repetitive nature of the processes lays the foundations for feasibility studies that highlight the costs of human resources, technical resources, and procurement needed to manage each order.
- Not only invoices for part payment but also project milestones methods require defining the accounting adjustments to be made when the financial statements are elaborated and when they are checked during the course of the year. What costs the company has incurred and accounted for against those that have not recorded revenues yet should be measured. This means having to assess the works in progress, or adopting a management approach on an accrual accounting basis.
- Hence, the importance of preventive management of cash inflows and outflows, because the economic balance may not match in the financial balance. The main cash outflows are represented by the cost of human resources. These are monthly financial disbursements that cannot be deferred. Conversely, receipts (active flows) vary greatly based on the type of contract determined.
In order to correctly manage these critical issues, a tool that can embody these specific requirements and turn them into its distinctive elements should be adopted. Only software designed and developed for companies that work on a job order basis can take up the gauntlet of critical issues and guarantee business is properly managed.
