By the end of the month, we produce a maintenance cost report that may lack accuracy due to delays in charging for external services on work orders. These charges are often posted after the work is completed, with payment due within 30 days. How can I track real-time maintenance costs at the end of the month for better accuracy?
Prepare the report within two months! Differentiate your tasks by category - for example, Preventative Maintenance (PM) tasks may remain relatively stable. It is crucial for Management to track the expenses of significant projects. Reporting should not be a challenge: simply list the number of PM jobs completed at a cost of $10 each, calculate the average, and ensure the deviation is within 20%. Major projects attract attention, particularly when your manager must justify substantial expenses to higher-ups. Planned and unplanned shutdowns, overtime costs, cost avoidance strategies, rushed vendor orders at inflated prices, and frequent equipment breakdowns all present opportunities for enhancing efficiency.
There are two ways to track and analyze total maintenance costs effectively. The first involves accessing maintenance cost centers within the accounting module to compare planned versus actual expenses. The second method is to calculate the total costs associated with all work orders, including estimated, planned, and actual expenses. It is important to promptly fill out work orders upon completion to ensure accurate reporting of costs. Delayed submission of work orders can result in inaccurate maintenance cost reports, especially for shorter timeframes like monthly reviews. However, work order costs are valuable for conducting long-term cost analyses, such as determining the lifecycle costs of equipment or annual maintenance expenses.
I agree with Steven and Josh about the importance of summarizing the cost report after 2-3 months. However, my key performance indicator (KPI) requires measuring maintenance costs per product (ton) on a monthly basis. I have addressed this issue with personnel in the CO module, who suggested a similar approach to what Josh initially recommended.
Why it's Time to Ditch Your KPI: Don't Punish Yourself for Not Meeting Unattainable Goals. Hold Yourself Accountable for Your Success, Not a "Stupid" Key Performance Indicator.
No problem, Steven. I will inform my upper management of the suggestion you provided. Thank you for your input.
One approach you could consider is implementing a cost accrual system for external services. By estimating the likely costs at the time the work is ordered, you can include these in your end-of-month reports. Then, when the actual costs are invoiced, you simply adjust your figures accordingly. It's not perfect, since your estimates might be off, but it would likely improve the accuracy of your reports compared to the current system. Additionally, it might be worth discussing with your vendors if they can provide faster invoicing, reducing the lag time.
✅ Work Order Management
✅ Asset Tracking
✅ Preventive Maintenance
✅ Inspection Report
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Answer: 1. How can I track real-time maintenance costs for accurate reporting? - One way to track real-time maintenance costs is to implement a system that allows for immediate recording and monitoring of all maintenance-related expenses as they occur. This can involve using software that integrates with work order management systems to capture costs in real-time.
Answer: - To address delays in charging for external services on work orders, consider negotiating payment terms with vendors that align more closely with your reporting cycles. Additionally, you can work with vendors to ensure timely invoicing and develop a process to reconcile and record these charges promptly.
Answer: - To improve the accuracy of maintenance cost reports by the end of the month, focus on timely and consistent recording of all maintenance-related expenses, including external service charges. Implementing real-time tracking mechanisms and streamlining invoicing and payment processes can help ensure that all costs are accounted for in a timely manner.
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