UEM Collaboration Saves National Home Builder Over $1 Million
RadiusPoint recently collaborated with a national home builder to simplify the process of utility ordering and ensuring installations for more than 5,000 new home projects yearly. During this collaboration, RadiusPoint uncovered monthly billing exceeding $25,000 for homes sold two years earlier and identified over $100,000 in refunds from vendors holding funds for closed locations. The anticipated annual cost savings for this client are estimated to surpass $1 million, based solely on the initial six months of RadiusPoint’s services.
Background
A national home builder faced significant challenges in various areas, particularly in handling utility vendors, invoices, and expenses. With multiple divisions under corporate management and an annual workload of over 5,000 new home projects, each division independently managed meter installations but directed the resulting invoices to the corporate office for payment. This decentralized process led to numerous problems, including multiple service outages that required division intervention to restore services.
Issues
The initial challenge for the home builder revolved around service setup. Several individuals in each division handled order placements, causing delays in meter installation and service initiation, consequently impacting the start of construction projects. Additionally, the lack of a standardized process and the involvement of multiple individuals led to vendors not sending invoices to the corporate office. Often, invoices were mistakenly delivered to empty lots without mailboxes, resulting in returns. Subsequently, vendors would disconnect services, further delaying the work of trade workers on the homes. These complications collectively resulted in significant losses, amounting to thousands of dollars due to decreased productivity.
The subsequent problem concerned accurately tracking expenses related to meter usage. Typically, builders assign charges for individual homes to different accounting codes, enabling corporate oversight across various completion stages. This accounting system also offers insights into the completion date and turnover to the Sales department. However, while the corporate office had a daily method for monitoring home progress and stages, there was no established process to align this information with monthly utility expenses.
Adding to the list of issues was the discontinuation of services after home sales. Although each division was responsible for disconnecting services, this task was often neglected. The process of transferring services to the new homeowner’s name relied on the homeowner, but due to consistent confusion around final permit approvals and multiple contacts required with the vendor, ensuring that the homeowner completed this step was frequently overlooked.
Solutions
Service Order Placement
In their initial interaction with the Accounts Payable department, RadiusPoint pinpointed various issues that could be resolved through their Invoice Processing services, offering improved invoice management and cost allocation. While assessing the current service order process, RadiusPoint identified a fundamental issue underlying most of the problems faced. Leveraging their proprietary software, ExpenseLogic, the RadiusPoint team developed a streamlined service order process for each division. This involved creating a customized order form tailored to the builder’s requirements. The form also featured a link accessible on the builder’s tablet, enabling on-site service order placements.
Another valuable feature contributing to the process streamlining was the capability for the builder and their team to include permits or necessary documents when placing orders with utility vendors for future needs. Many utility vendors require a city government-issued permit before setting up a meter at a property. RadiusPoint incorporated this ability to attach documents to the order forms tailored for each builder’s requirements. These documents are centralized in the Site Manager Dashboard within ExpenseLogic, ensuring easy access not only for the division but also for anyone within the corporate structure. This customized addition significantly reduced the hours spent searching for documents previously held by one individual.
Timely order placement and ensuring prompt meter setups were crucial, and RadiusPoint facilitated this by collaborating with vendors through ExpenseLogic’s Moves, Adds, Changes & Disconnect (MACD) module. This module provided comprehensive tracking of the ordering process and seamlessly connected with the Invoice Processing section to guarantee proper invoice setup and allocation to the correct Cost Center, ready for the first invoice. One significant corporate benefit was the RadiusPoint team’s ability to track missing invoices. Daily Missing Bill reports were generated to identify vendor invoices that hadn’t been received. RadiusPoint then contacted the vendors to retrieve and process these invoices. Prior to RadiusPoint’s involvement, missing invoices could result in the property receiving the invoice after service disconnection, causing site downtime and productivity loss.
Proper Accounting and Allocation
ExpenseLogic functions as comprehensive accounting software, enabling the allocation of invoices to Cost Centers or project codes. Leveraging the builder’s daily report illustrating the 12 stages of home completion, RadiusPoint easily devised a solution for accurate allocation. They implemented a daily import system into ExpenseLogic, aligning Cost Centers with invoice expenses. This method ensured precise monthly expense allocation corresponding to each home’s building stage, facilitating accurate chargebacks and providing enhanced visibility into expenses. Additionally, it offered improved forecasting capabilities for total costs, adding value to the process.
Disconnecting Utility Services
One frequently overlooked aspect was the essential follow-up required after home sales. Divisions were responsible for contacting the vendor two weeks post-sale to confirm the new homeowner’s transfer of electric, gas, and water services into their name. Due to difficulties in tracking the home-building stage, these follow-ups often slipped through the cracks. Compounding the issue, vendors sometimes hesitate to change the account name due to pending permits or final inspections, necessitating additional follow-ups after inspection completion. Failures in inspections further prolonged the process. These hurdles transformed what should have been straightforward into a complicated and time-consuming procedure.
RadiusPoint established a clear timeline for vendor follow-up. By utilizing the MACD module in ExpenseLogic for service orders, the follow-up, including any required documentation, became more efficient. With all stages meticulously tracked, upon receiving subsequent invoices, RadiusPoint ensured the final bill accuracy and requested any outstanding credits, streamlining the process.
Results
The custom processes established by RadiusPoint through ExpenseLogic enabled numerous end users to not just initiate orders but also track home stages, offering clearer insights into utility expenses for each home build. This innovative approach empowered the home builder to reassign staff and, within the initial six months, achieve nearly $1M in savings.