Take Control: Expert Tips on Inventory Management

Who manages inventory for your company? Taking full control over inventory management can give you critical insights to optimize and grow your business, but the process may seem too daunting or complex to tackle on your own.

Tracking inventory with ServiceTitan doesn’t have to be scary, says Kristy Druding, Director of IT Services and Operations at Ace Hardware Home Services. 

“I don't think inventory is scary, but it does require a certain type of person,” says Druding, a featured ServiceTitan expert on a recent episode of the Mastering ServiceTitan podcast. “You need someone who's organized, really pays attention to detail, and who can figure things out when there's an issue.”

In this episode, Druding shares her top strategies for mastering inventory management, including covering multi-location setups, streamlining purchase orders, monitoring job costing, organizing price books, and replenishing inventory.

 Currently, Druding is working with 17 Ace Hardware Home Services locations at different phases of implementing best practices and standards for inventory management.

“Right now, out of the 17, we have six that are tracking full quantity on hand, and we have a centralized price book that we're implementing at all of our locations,” Druding says. “We're also merging a couple of our tenants together, so we have to put them onto inventory now and implement the centralized price book. We'll get all those companies on first and then the rest of the companies are going to go on in early 2025.”

>>Listen to the full podcast on inventory management now on Spotify, Apple, or YouTube.

What is ServiceTitan Inventory Management?

For best inventory management, you need to know what materials and equipment you have on hand, the location and pricing for everything, and what’s available for the next booked job. 

The ServiceTitan inventory module simplifies inventory management with streamlined efficiencies to generate purchase orders, manage returns, conduct inventory counts, do transfers, make adjustments, and pay bills—all from one system.

Druding says implementing the ServiceTitan inventory module starts with running all of your purchase orders through ServiceTitan.

“Basically, you're purchasing in ServiceTitan and then it's tracking all of those materials and equipment,” she explains. “Then, you're able to know what you have on your trucks and what you have in your warehouse. And it makes it easier to order items, because you know when you're going to need them. You know where all of your materials are at all times.”

What are the benefits of ServiceTitan Inventory Software?

ServiceTitan Inventory Management offers two main benefits for contractors:

1. Timely inventory replenishment 

2. Accurate job costing

With replenishment, you can easily run reports to see what materials and equipment have been used by which field technicians, then work to replace them on their trucks before the next job. To understand your profitability on every job, you can run job costing reports in ServiceTitan to make sure all inventory is accounted for and invoiced correctly.

“If you're not tracking inventory, it's really easy to not put an item on an invoice. But when you are tracking inventory, if you forget to put an item on the invoice, oh man…,” Druding says, referring to the accounting errors that result from inaccurate invoicing.

“And if you're not job costing, how do you know what your margins are?” she adds. “How can you run a business if you don’t know how much it costs to run the business?”

A third benefit, she says, is eliminating the worry of your field techs taking on side jobs.

“You eliminate the side jobs. They're not going to use your materials after hours,” Druding says.

How to get started with ServiceTitan Purchasing and Inventory

The smartest way to get started with ServiceTitan Purchasing and Inventory, Druding says, is to “start small.” 

• Add vendors to ServiceTitan. Everything you purchase should go through ServiceTitan.

“I start with purchasing. For everything. You should have all your POs [purchase orders] inside ServiceTitan and anything that's related to a job should be bought on a purchase order,” Druding explains.

• Implement a centralized, but organized price book for use at all locations.

“We have all the materials in the price book that we want to track. You need to organize your price book. You need to know what you want to track,” she says.

• Start with equipment, then add materials.

 “When you order equipment, you receive the PO, and it automatically adds it to the invoice. And then get into the nitty gritty of tracking all your materials,” Druding says.

If you’re a ServiceTitan customer who’s struggled with setting up the Purchasing and Inventory modules correctly, Druding says you may have an accounting integration issue or lack the necessary resources to properly input all of your purchase orders.

“We always prepare. If we're going to implement Purchasing and Inventory, we need at least one additional hire at that location,” Druding says of the Ace business model.

Some businesses may even be able to shift responsibilities and manage the PO-inputting process in-house, she adds, but just make sure the job gets done correctly.

“Find the right person. If you don't have them, you're going to have to hire them. Make room in your budget and prepare to hire someone to help you put purchase orders inside of ServiceTitan,” Druding says.

Look for someone who’s organized, displays leadership qualities, and is willing to work as a team player to achieve your inventory management goals. Druding says this person must be good with people, as they work with all levels of the business to track every item on every invoice. 

“I think the people aspect of it, getting the technicians to put items on an invoice is pretty hard. You have to hold them accountable,” Druding says. “We've seen it so many times, where we're not holding people accountable, and they're just not going to do it.

“But then when you start doing cycle counts and bringing the trucks in and saying, ‘Okay, if you hit this mark, there's an incentive.’ Give them something to want to work for it,” she adds. “And then once they're doing it, it's easy.”

Incentives can be random gift cards or add-ons to their performance bonus for keeping their trucks clean, organized, and busy.

Good with ServiceTitan Purchasing? Now, add Inventory

For best practices on ServiceTitan Purchasing, Druding says your price book must be fully set up with clean categories for all materials stocked in your warehouse and on your trucks.

“If your price book is not set up, some people do Purchasing and they'll get a miscellaneous item and that's what they use for everything,” Druding says. “And that's a no. Make sure you have clean categories.”

Next, train your technicians and installers to list every single material used on the job on the customer’s invoice. Or you can train someone on the office staff to set up the invoice ahead of time to make it easier for the field workers. 

You can also add equipment categories, but that requires knowing serial and model numbers. Druding suggests adding equipment data as you purchase the equipment.

Before implementing ServiceTitan Inventory, Druding says it’s important for your team to understand the order of operations.

“What’s the order of operations? It means you add an item to a price book, you go into the price book, and you click that little toggle to turn on inventory tracking for that item. After that's done, then you put it on a purchase order,” Druding explains. “You don't want any items that are on a purchase order outstanding when you turn inventory tracking on. 

“You add it to the purchase order. You receive the purchase order before the job's completed. (You have to have the item in order to install it in a house and complete a job.) So, receive that purchase order, add it to the job, then export it to the accounting software.”

If you have any returns, be sure to add them as a return before exporting to your accounting software. If you fail to add returns or the right items to the invoice before exporting, you may need to create an adjustment. If you don’t know how, ask for assistance.

“A lot of times, people try to clean things up and they're not doing it right,” Druding says. “I always tell people, ‘If you don't know, ask. That's what my team's there for. We'll help you. So just submit a support ticket and we'll help you get through that.’

“I think for a location that's looking to implement Inventory on ServiceTitan, they should work very closely with their customer success manager,” she adds.

Common inventory pitfall to avoid

Every item (materials and equipment) used on a job must be listed on the invoice. Train your techs, installers, or office staff to be accountable for this task. That way, your inventory valuation in ServiceTitan matches the inventory valuation in your accounting software, and you’ll avoid write-offs on your balance sheet.

Druding says she learned this lesson while trying to implement ServiceTitan Purchasing and Inventory at one of her first Ace locations.

“It’s really understanding the modules and knowing the workflows,” she says. “Understanding that in order to bring an item in, you have to put it on a purchase order or you need an adjustment. And in order to take an item out, you need to put it on an invoice or on an adjustment.

“When you're tracking inventory, you just need to know where the process went wrong in the order of operations,” Druding adds. “Just stop and think about it, and then put together your plan to fix that issue.”

You can find this interview and many more by subscribing to Mastering ServiceTitan on Apple Podcasts, on Spotify, or our website, or search for Mastering ServiceTitan in your favorite podcast player.

Know a business that could use a bit of muscle from ServiceTitan? Refer them here!

Listening on a desktop & can’t see the links? Just search for Mastering ServiceTitan in your favorite podcast player.