Business News and Notes
Content provided by the accounting firm of Dorfmann-Robbie specializing in construction accounting.

New technology helps tighten up small-tool management

Contractors typically pay close attention to the whereabouts and maintenance of large equipment while often overlooking small tools, such as power drills and reciprocating saws. This may prove an expensive oversight, as the costs of losing these items can quickly add up. And the more tools a company has, the more threatening the potential losses.

Some contractors might try to alleviate or preclude replacement expenses by buying cheap tools. This approach, however, can slow productivity when these cut-rate products fail or work poorly. What you really need to do is quite simple — keep better track of your small tools.

Go high-tech Fortunately, technology can greatly help you get a better handle on this matter. For example, electronic bar-code systems easily and efficiently label, coordinate, track and catalog tools in real time. These systems usually involve three components:

1. Bar codes. Each tool gets its own bar code displayed on polyurethane labels designed to hold up under repeated on-the-job wear and tear.

2. Handheld scanners. Your project or equipment managers use portable units to scan the bar codes when assigning tools and accepting returns.

3. Tracking software. An application tracks items via a database that you can also use for browsing, billing and running reports. In addition, the program records repair histories and maintenance schedules.

The cost of bar-code technology varies, but the investment is well worth it. In fact, most systems from companies such as Symbol Technologies, EDP System Services and Waterwheel Software pay for themselves in three to six months. Almost immediately after you implement one, you’ll likely dramatically reduce theft, loss and misuse.

Improve management efficiency
This technology also improves management efficiency. How? You can let managers know that, if the system doesn’t show tools as coming back from job sites at completion, you’ll charge the project for them. Thus, managers will more closely monitor and protect these items to avoid going overbudget.

Bar-code technology may also reduce your legal liability. Federal regulations often require workers to don safety gear such as goggles, hard hats and respirators. And these systems enable you to show that you issued employees the proper equipment, which could in turn limit your accident liability.

Get ready for the next generation
Sound exciting? It is — and the next generation is already on the way. Technology companies are currently refining radio-frequency identification systems, which place tiny chips in tools that transmit data to a handheld receiver. The chips will likely replace bar codes, though their expense will probably keep them out of the mainstream for a while. Solutions like this will further streamline small-tool management, minimizing costs and maximizing returns all the more.