5 Ways to Prevent Equipment Rental Billing Disputes

5 Ways to Prevent Equipment Rental Billing Disputes

Prevent Rental Billing Disputes

Equipment rental is a critical part of the equipment strategy for any construction company, whether that strategy is for rental to be your entire fleet, supplement core fleet operations or to better control costs.

Through the rental process, acquisition, operation and billing, easily understanding your future end-of-rental invoice has traditionally been nearly impossible. This is due to most of the cost of the invoice being unpredictable and normally not shared through verbal, faxed or emailed rental quotes.

When invoice costs are a “surprise”, that’s the perfect formula for an equipment rental billing dispute.

To prevent billing disputes, it’s best to:

  1. Consistently build RFQs with accurate and clear expectations
  2. Ensure rental agreement terms and conditions are transparent
  3. Leverage a contract management system
  4. Better track the costs that are usage-dependent
  5. Document asset condition at delivery and call off

Next, we’ll dive deeper into each of these methods with the end goal of reducing rental billing disputes.

Consistently Build RFQs with Accurate and Clear Expectations

To improve your RFQ (request for quote) process, it’s ideal to use a digital tool that allows your organization to consistently create RFQs with all necessary details, thus ensuring your supplier is 100% clear on what you’re looking for. An ideal RFQ builder contains:

We know you’re like the rest of us – time was tight and you called your rental partner, “heard” your order was clearly received, then were surprised when the asset arrived – it didn’t match what you think you ordered.

  • Handling of the organizational approval workflow. Make sure that spend is approved.
  • An easily used equipment taxonomy/list of equipment types. Ensure everyone gets just the exact type they were expecting.
  • Proactively identified alternative types. Suppliers don’t have everything. Help ‘em out.
  • A preferred model list builder. Need a specific model? Make it clear, up front.
  • Age maximum controls. Need a machine for sub-zero work? You only need young equipment.

A software tool like the RFQ Builder from IronUp meets all of those needs and ensures that you provide only approved, detailed, accurate RFQs to your rental suppliers.

Basic Info

Ensure Rental Agreement Terms and Conditions are Transparent

This is really all about better managing the nuances of a rental agreement, aiming to reach expert-level awareness of all components of a rental agreement.

The major components of a rental agreement include:

  • Base Rental Rate
  • Surcharges (Environmental, Transportation, Rental Protection)
  • Usage Expectations (and its impact on Rate Multipliers / Overhours Billing)
  • Government Taxes

There are a few of these items that are, by default, clear and transparent. These include:

  • Base Rental Rate
  • Government Taxes

A lack of transparency in terms and conditions, primarily surcharges and usage expectations, are where invoices often go wrong. 

To address this issue, you will need to leverage a consistent RFQ builder (see above). A modern RFQ builder will ensure data is entered consistently for all aspects of the contract.

Through the IronUp platform, our RFQ Review Feature does this, translating terms and conditions of supplier agreements into an easily compared interface.

Review Quote

Through this “structured data”, you can easily see all critical terms and conditions from all potential suppliers, BEFORE you sign the dotted line, as well as compare their relative value to one another, as well as automatically identify which quotes are above acceptable thresholds.

Leverage a Contract Management System

Often rental invoices fail to integrate favorable terms that a contractor may have negotiated through a contract with the supplier. These service contracts are more common when working with National Suppliers and may include terms like:

  • Guaranteed service times
  • Rate discounts
  • Preferred models

Using these contracts in the real world, and ensuring your invoices come out with expected terms, can be challenging. This is due to the complex nature of making sure a legal agreement is reviewed in detail at the store level. Additionally, contractor employees may be unaware of the agreement’s existence. 

To address this, your contracting organization should leverage a central contract management system that automatically inserts key contract terms into each rental RFQ, for each respective supplier, with no extra effort.

Within the IronUp platform, contracts can be added for specific suppliers, are accessible to all allowed employees and structured terms are automatically included in RFQs, removing the administrative burden from both the contractor’s employees, as well as the supplier’s employees.

IronUp File Management Feature

Better Track the Costs That are Usage-Dependent

Looking back at the main components of a rental invoice, Usage Expectations are often the most unpredictable. These invoice terms are designed to protect the supplier from higher-than-expected utlization.

Usage Expectations revolved around the concept of “number of shifts per day to use the equipment”. The default assumption is 1, but 2 and 3 shifts per day can also be selected. These shifts then translate to rental rate multipliers. At the end of the rental agreement, if there’s a difference in actual vs. expected usage, the difference may result in overhours billing.

At the end of the day, it’s critical that you set reasonable expectations in the RFQ and consistently monitor actual usage for all assets. Because…

Tracking Time Utilization of Your Rented Fleet is Critical to Financial Performance

Traditionally, due to the fragmented nature of managing rentals, usage reporting for any given asset has been a challenge. The IronUp platform has been designed to make usage reporting easy through integrated web and mobile apps and the translation of utilization information into easily understood call off recommendations. Optimized rented fleet management results in better utilization of project budget.

Rental Rate Multipliers via Overhours

Document Asset Condition at Delivery and Call Off

Ever been billed for asset damage that you’re confident was already there? Or wasn’t there when you returned the asset? Unless you had pictures and documentation at asset delivery and call off, you’re at financial risk. Damage billing can be a major source of rental billing disputes.

The easiest way to protect yourself and your organization is to take consistent pictures at delivery AND at call off AND store these images in a centrally accessible platform for your entire organization AND make sure they are easily referenced by rental agreement, by invoice and by project.

Sounds easy, right?

Fortunately, IronUp has it handled. Via our mobile app, automatically get notified at delivery and call off to complete an inspection. All images are stored within the rental request, which can easily be viewed by project or by supplier.

Mobile App 2
IronUp Marketing
IronUp Marketing
All things marketing at IronUp.


Share on facebook
Share on twitter
Share on linkedin

Ready to Get Serious About Rental Supplier & Equipment Management?

Get Started for Free

Need help? Feel free to live chat us, take a personal demo tour or set up a 1-on-1 demo.


Sign up and receive free reports, insights and best practices to help you more efficiently, and professionally, manage your “rented” equipment fleet.

By clicking this button, you agree to our Privacy Notice and Terms of Use.