Invoicing from your uniform rental with industrial laundry (“rental”) provider seems like it should be straight forward – there’s a contract and the rental pricing is in the contract. So, why is the invoicing process one of the most frustrating things that customers have to deal with in a rental program? There are a few key reasons which we’ll explore in this post and video below, featuring an interview with Chad Barker, Tyndale’s Regional Sales Director, who spent over a decade working for two of the largest uniform rental with industrial laundry providers.
First of all, the invoices are hard to read. Uniform rental invoices have a lot of information and clutter on them. Beyond the weekly rental charges per employee, there can be price increases (which we’ll cover in another blog and video) and a variety of ancillary charges that could easily be missed if not reviewed carefully. Ancillary charges are everything other than the normal weekly rental per employee charge. They can be anything from service, loss and damage, and set-up charges to charges for a name tag, emblems, patches, etc.
Ancillary charges can also be equipment charges. Most customers in a rental program are paying for locker rental and soil bins on a weekly basis. Some rental companies also charge for hanger racks and laundry bags. These charges might sound small – for example, weekly locker rental for 8 people is typically a couple dollars, soil bin rental for 8 people is typically a dollar or two – but if you have a 100 people on an invoice, these charges really add up. This leads to rental company customers feeling like they’re being nickeled and dimed on every little thing. As Chad mentions in the video, ancillary charges can add up to hundreds of dollars per week depending on how many employees are in the program and how much turnover your company has.
Secondly, for several reasons, it’s hard to keep track of the charges on the invoice. One reason is many rental companies still provide paper invoices. Paper invoices include significant detail. Typically, there are 10 employees on each invoice – if you have a couple hundred employees, that’s 20 pages plus equipment charges – you could easily have a 25-page invoice – or longer – to sort through on a weekly basis. If the rental company uses hand held computers the route driver will print a receipt, which is a little wider than receipts you would see at a restaurant or retail store – and you could have multiple arm’s lengths of invoices to look through.
On top of the less than ideal invoicing format, the customer often feels rushed to get through the invoices, the route driver is typically standing over their shoulder waiting for sign-off on the charges and in a rush to make it to their next stop. Plus, the customer is typically in a hurry to sign the invoice because they have other core business responsibilities to focus on. So, the best the customer can do is skim through the multi-page invoice or receipt which leads to several ancillary charges that are overlooked.
If the customer questions a charge or finds a mistake, the route driver has the ability to make adjustments prior to or at the time of signing. Adjustments requested after the delivery date are difficult to make because invoices are typically finalized and settled the same day they are signed. Route drivers are actually incentivized against issuing credits because they’re trying to maximize volume or revenue, which in turn maximizes their pay. Bottom line is, it requires a great deal of work for the customer to go through the invoices, on top of their normal job responsibilities, and it’s a cumbersome process to get the credits issued, so it’s often not a priority and customers are charged for more than they originally anticipated.
Stay tuned for our next video which explores price increases in a uniform rental with industrial laundry program. Typically, price increases occur automatically once a year on the anniversary date – typically 5% or CPI, whichever is greater. Additionally, there are off-schedule price increases which can happen once or twice a year. Chad Barker and Scott Margolin, Tyndale’s Vice President of technical, will get into this next time.