What is on your trucks, and what it is costing you

Every service van is a small warehouse driving around. Nobody counts it, nobody values it, and it is cash you have already spent sitting in traffic.

Three vans carrying a few thousand dollars of fittings each is real working capital tied up permanently. It is not waste — that stock is what lets you complete a call in one visit — but it is worth knowing the size of, and worth stopping it from growing on its own.

The accounting problem underneath it

Here is what happens in most contractor books.

A tech restocks at the supply house. The purchase is coded to materials, and usually to whatever job was open that day. It disappears into that month's material cost.

Two consequences follow, and both are quietly damaging.

Job costing goes wrong in both directions. The job that happened to be open absorbs cost for parts that went on the shelf. The job those parts are eventually used on absorbs nothing, because it was already paid for weeks earlier. Neither job's margin is real.

The stock itself is invisible. There is no account showing what your vans are holding, so the number can only grow. Nobody notices, because nobody is looking at a figure.

The fix, which is simpler than it sounds

Separate material bought for a job from material bought for stock.

Job material is coded to the job as it always was. Stock material goes to its own account — van stock, or shop stock — and comes out when it is used.

You do not need a full inventory system with barcodes. For most service businesses, the useful version is:

• Restocking purchases coded to a stock account rather than to a job
• Parts used on a job recorded against that job when the work is written up, which most field service software already captures
• A physical count once or twice a year to true it up

That is enough to make job costs honest and to put a number on what the vans are holding.

Deciding what to carry

The trade-off is straightforward once you see both sides.

Carrying more means more first-visit completions, fewer supply house trips, less drive time and happier customers. Every return trip costs you a slot.

Carrying less means less cash tied up, less that can walk, and less obsolete stock going out of date on a shelf.

The way to settle it is not a rule of thumb but your own callback and return-trip data. If techs are making supply house runs mid-job for the same handful of parts, those parts belong on the van. If something has sat there for a year untouched, it does not.

That analysis needs callback and return-visit tracking, which is the same record keeping seen from another angle.

Shrinkage, without making it personal

Stock disappears. Some of it is genuine loss, some is parts used on jobs and never written up, and a small amount is theft.

The honest framing is that unrecorded usage is usually the bulk of it. A tech who fits a part and forgets to add it to the job has cost you the part and the job margin, without any intent.

So the fix is usually process rather than suspicion: make recording usage part of closing out the job, count periodically, and look at variance by van rather than by person. A van consistently losing more than the others is information — it might be a habit, a route, or where it parks overnight.

What good looks like

A stock account with a number in it that you have seen this quarter. Job costs that include the parts actually used on that job. A short list of what every van carries as standard. And a count twice a year that does not produce a nasty surprise.

None of that requires software you do not already have. It requires the purchase to be coded to the right place on the day it happens.

Related

• Job costing for contractors
• What callbacks are really costing you
• Profit per truck