Delivering containerized supplies to the country’s troops in remote and rugged locations is a logistical challenge. When one of the country’s foremost experts in forklift design focused his efforts at solving this challenge, the result was Kalmar RT Center, LLC. Today the company is the premier provider of rough-terrain container handling equipment to the U.S. Department of Defense. With service centers in Okinawa, Afghanistan, and Kuwait and in its home base of Cibolo, Texas, the company’s skilled mechanics maintain and repair the equipment it manufactures and sells.
Eleven Million Dollar Problem
As the company’s growth took off, its entry- level accounting system was left in the dust. The combination of QuickBooks, custom databases, spreadsheets, and proprietary service management software couldn’t keep up. When the Department of Defense auditors came in to review Kalmar RT’s accounting and service maintenance records, the company failed the audit. This meant that Kalmar RT could no longer invoice the government and could not collect the nearly 11 million dollars it was owed. Bob Wills was hired as CFO and charged with remedying the situation. “We needed integrated business management software with tight financials and the ability to manage our service and repair contracts.”
After reviewing several ERP solutions with service management capabilities, Kalmar RT decided on Sage 300 (formerly Sage ERP Accpac) with Technisoft Service Manager. Tipping the scales in favor of Sage 300 was the consulting firm representing this solution, Mindover Software. Wills was impressed with Mindover Software’s experience and expertise helping complex service and maintenance companies like Kalmar RT. Mindover Software had Kalmar RT’s new solution up and running in just a few weeks. “Our consultant at Mindover Software is a hero around here,” quips Wills.
Eleven Million Dollar Plus ROI
Just one month after going live with the new accounting and service management solution, the company easily passed its government audit and was able to collect 11 million dollars. “To say the system paid for itself is like saying the ocean is wet!” laughs Wills.
The system’s tight financial controls and ability to accommodate the precise account structure required by its customers ensure that Kalmar RT is able to pass the toughest scrutiny—but the ability to collect on its receivables was just the beginning of the new solution’s return on investment.
Under its government service contracts, Kalmar RT is authorized to spend up to a certain amount repairing equipment before it must undergo a lengthy authorization process. Previously, without a reliable method for tracking its project costs, Kalmar RT would often find out mid-repair that it had exceeded its authorized amount and have to stop work and wait for the required authorization. This was enormously costly for the company in terms of wasted labor hours, lost revenue, and cash flow. “The down time was just killing us,” recalls Wills.
Using Sage 300 and Service Manager, management has accurate up-to-the-minute numbers for each project. Using the powerful and intuitive estimating tools within the software, the company can determine in advance whether they are likely to exceed the authorized amount, seeking the authorization in advance and thereby ensuring prompt payment and uninterrupted productivity.
By tracking all of the costs associated with its service and repair operation in Service Manager, Kalmar RT can recover many of those costs that were previously written off as operating expenses. For example, by tracking its employees’ travel expenses associated with a repair, Kalmar RT is now able to bill for those costs. “Our ability to accurately track the costs associated with our projects in a clear and auditable way means those projects are more profitable for us,” says Wills.
Kalmar RT’s staff can access the system remotely via the Internet. This allows its overseas technicians to directly record travel expenses, spare parts, and labor hours associated with each project, ensuring each project is up to date.
With service data instantly available across the organization, Kalmar RT’s management team can make informed, strategic decisions about staffing, scheduling, parts ordering, and invoicing.
Mindover Software brought real value to the implementation, says Wills. Consultants recently held a training class for Kalmar RT’s operation staff to show them how the data they enter in the system impacts other departments. “The result of this ‘Accounting 101’ course,” explains Wills, “Is that our staff is now working together as a cohesive team. Everyone understands how their job fits in with this company’s operations.”
Mindover Software helped Kalmar RT increase its operational efficiency, streamline its service operation, and better manage its projects. “Mindover Software is very responsive and very knowledgeable—they’ve really helped to set us on the right track.”