A field service business can be busy every day of the week and still leave you wondering where the money went.
Usually, there isn't one huge problem to blame. It's smaller stuff. A job priced a bit too low. Half an hour wasted between calls. A part that gets fitted but never added to the invoice. An engineer making a return visit that nobody gets paid for.
On their own, none of these looks disastrous, which is exactly why they hang around unnoticed. Give them a full year, though, and those small losses together can take a serious bite out of your profit.
Most of them can be fixed, though. You just need to know where to look.
Pricing mistakes hurt more than most because you don't make them once, you repeat them on every single quote you send out.
One of the biggest problems is simply charging too little. Plenty of trades still set prices by looking at what nearby competitors charge and choosing something roughly similar. The trouble is, their costs aren't your costs. Their wages, overheads, travel, stock and target profit might be completely different.
Your price needs to come from your own numbers, and if it doesn't, you could be losing money on jobs that look perfectly healthy on the surface. Our guide on how to price a job explains how to build a price from the ground up.
Presentation makes a difference as well. Customers don't react to every price in exactly the same way, and small changes to how you package or explain a quote can affect what feels reasonable. That's covered in our guide to pricing psychology.
Then you've got scope creep.
It normally starts innocently enough. The customer asks, "While you're here, could you just take a look at this?" The engineer sorts it. Five or ten minutes disappears, maybe a small part gets used, and none of it reaches the invoice. Do that often enough and you're giving away a surprising amount of work.
You don't need to become awkward about every tiny request. You do need a way of spotting extra work and deciding what should be charged. That's what we cover in how to prevent scope creep.
Finishing the job is only half the story, because the cash still has to actually land in your account.
Late payment causes more damage than the invoice value alone suggests. While you're waiting, you're still paying wages, fuel, suppliers, insurance and everything else needed to keep the business moving.
In effect, you're funding the customer's delay.
The fix is rarely complicated. Clear payment terms help. So does getting the invoice out quickly and having a proper follow-up process instead of chasing only when the bank balance starts looking uncomfortable.
We've gone into the practical side in how to chase late payments and our broader guide to late payments in field service.
Cash flow can also go sideways when the work itself is seasonal.
One month is packed and the next is quiet. That might be normal for your trade, but it can still create problems if the busy months are expected to carry the slower ones without much planning.
A bit more control over seasonal cash flow makes those quieter periods far less painful.
Some losses happen before an engineer has even started the job.
Fuel is the obvious one. Poorly planned days can send engineers backwards and forwards across the same area, burning diesel and eating into working hours at the same time.
You can't get rid of travel in a field service business, but you can make it less wasteful.
That means keeping an eye on fuel costs and margins and paying more attention to route density, so jobs in the same area are grouped together where possible.
Parts create another headache.
Stock gets ordered and forgotten. Items sit on vans for months. Engineers use parts that never make it onto the final invoice. Sometimes nobody is quite sure what is on which van until somebody needs it, and every one of those situations has money tied up in it.
Better van stock and parts management gives you a clearer picture of what's being carried and used. For the wider process, there's also our guide to stock management.
Few things eat margin faster than going back to fix work you've already completed.
The second visit usually brings no extra revenue. You still have the wage cost, the vehicle, the fuel and the lost slot that could have gone to another customer. There's a reputation cost on top, especially once callbacks start becoming a pattern rather than a one-off.
That makes your callback rate worth watching closely. Even a modest reduction can free up a useful amount of engineer time. We break down the numbers and causes in the hidden cost of callbacks.
There's another time leak that isn't as obvious: the gap between paid hours and billable work.
Engineers have to drive. Sometimes they wait for access. They need to collect parts, find information and complete paperwork. Some non-billable time is simply unavoidable. The trouble comes when nobody really knows how much of the working week is vanishing into it, because you cannot manage what you have never measured.
Before deciding you need another engineer, it can be worth looking at how the existing team's time is being used. Better scheduling and fewer dead hours can create capacity you didn't realise you had, which matters even more when the industry is dealing with a skills shortage.
Admin rarely looks like a profit leak because it feels like part of running the business.
But somebody pays for every hour spent copying job details from one system to another, digging through notebooks, fixing missing information, or ringing an engineer because a form was left half-done. That somebody is the business.
Good job records help because the information gets captured properly while the job is happening. There's less to reconstruct later and less chance of something important disappearing between the van and the office.
Missed appointments are another everyday cost that's easy to shrug off.
An engineer turns up and nobody answers. Or access hasn't been arranged. The slot is gone anyway, along with the travel cost and the chance to put another paying job there.
You won't eliminate every wasted visit, but confirmations and reminders can cut the number. A clear policy helps too. The same thinking applies to last-minute cancellations, where a bit of structure can stop an empty diary slot becoming a complete loss.
Once you've started looking closely at where money slips away, you'll often spot ways to improve the revenue you're already generating.
Service agreements are a good example. Instead of waiting for customers to call when something goes wrong, an ongoing service agreement gives you planned work and more predictable income. It also makes scheduling easier because you have more control over when that work happens.
That's useful for cash flow, but it can also help you build tighter routes and make better use of the team.
Trying to fix everything at once usually turns into a long to-do list that nobody has time to finish.
Pick the leaks costing you the most.
For one business, that might be weak pricing. For another, it'll be callbacks. Somewhere else, engineers may be spending far too much of the day on the road. Start there.
Once that problem is under control, move onto the next one. The money you're looking for may already be coming into the business. The job is to stop so much of it slipping back out again.