Cost Recovery is an essential element in maintaining the health of a business, and this is especially true in the heavy construction world, where contractors may find themselves engaged across many projects with different contracting organizations. MagikMe Equipment’s Cost Recovery product is designed to streamline the cost recovery process by providing accepted third-party benchmarks on a common platform. However, after decades serving this industry, MagikMe Equipment has seen many successful and unsuccessful cost recovery processes. We’ve highlighted some of the most common problems and the most successful best practices below.
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Many of the most detrimental roadblocks to an efficient cost recovery process occur within a construction business. Some of the most difficult hurdles to overcome are listed below; contractors should avoid implementing these where possible.
- All rate requests filtered through a single individual. Sending everything through one person creates a bottleneck and increases the chance that something gets lost during the process.
- Multiple data sources for rate information. Some organizations have multiple spreadsheets, documents, or systems which make it easy to end up with incorrect or outdated information
- Analog internal processes. Many companies are still using printed book forms of ownership and operating rates instead of the simpler online Cost Recovery tool.
Even if a contractor has avoided internal logjams in the cost recovery process, there is always a chance that inefficiencies can be introduced from external sources. A few of the roadblocks to reimbursement that commonly plague project owners are listed below—proper communication and clear expectations between contractor and contracting organization can minimize these issues.
- Unclear or vague equipment descriptions. Always be specific. Include specific manufacturer and model information when submitting reimbursement requests.
- Submitting questionable/untrusted documentation.
- Rates with incorrect or missing adjustments. Always check your contract to ensure you’re including all required regional and model year adjustments.
With so many potential pitfalls in the cost recovery process to avoid, successful contractors will have a standard template for cost recovery forms. A well-prepared reimbursement request should contain the following elements:
- Name of the organization where the request will be sent
- Equipment make, model, year, and specifications
- Regional adjustments
- Age adjustments
- Hourly rates, the number of hours used, and the total cost
MagikMe Equipment’s Cost Recovery product is designed to assist both contractors and contracting organizations in avoiding the internal and external roadblocks that impact cost recovery. Below are a few of the best practices in using the product—these are the keys to success in maintaining a successful cost recovery process.
- Save your fleet to MagikMe Equipment. Saving your fleet helps you avoid looking up the same model each time you need it.
- Turn on Fleet collaboration within your organization. Fleet collaboration allows you to see changes a coworker makes to a group or saved model, and vice versa.
- Create project-based groups. Creating groups for individual projects is a great way to keep your fleet organized.
- Apply group-level adjustments as specified. This allows you to apply all required adjustments for a specifying organization at once.
- Share group with project owner. Sharing groups removes any concern of questionable documentation or inaccurate rates.
- Create official cost recovery usage reports. This report includes all of the information listed above that a well-prepared reimbursement request should look like.
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If you need any help with any of the keys to success, you can watch a full-length webinar here, which features Greg Lutz (Director of Marketing and Product) and Garrett Schemmel (VP of Asset Intelligence) in a detailed walk-through of how to use the product to strengthen your internal process. Alternatively, your organization can reference our product guides for detailed step by step instructions.
