Getting paid for 3rd party Line Maintenance is often much more complex than one might think. In an ideal world, an MRO would get paid in full at the point of completing maintenance. However, the real world is not so simple and what actually happens is quite different!
In reality, payment slips in two directions; value and time. This slip lowers the value of maintenance and delays the payment. Slip as a concept is the difference between the real value (revenue) of maintenance in real time and the resulting lower payment at a later point in time.
Every MRO has a degree of slip. However, it can be difficult to quantify and many do not realise how large it is.
Factors effecting time-based slip are items such as; delays in staff completing charging sheets, delays in consolidation of charging data, delays caused by accounts querying engineering staff on data collection, delays through customer queries and finally, delays due to payment terms. Whilst payment terms can be controlled, the aforementioned items are harder to control and are dependant on the quality of your systems and people. In some circumstance, we have seen time-based slip of up to 6-months not including payment terms. That can put an awful strain on a business’ cash flow.
Factors effecting value-base slip are items such as; engineering staff failing to, or forgetting to record charging sheets, or spreadsheets; engineering staff partially completing charging sheets; errors in transcribing, collecting, or consolidating data; customer queries that are unable to be evidenced and result in a credit. These are all common place and erode, or cause a slip in the value of maintenance completed. We have witnessed first hand instances where value-based slip was as high as 20% of revenue!
A core feature of MRO-PRO is its ability to increase the accuracy and speed of data, therefore, reducing slip in both directions. Work Orders are completed by engineers in real-time at the aircraft. Further, they are customised by the MRO to each specific operator and thus, ensure engineers are capturing the exact right data to facilitate the contract. Completed Work Orders are submitted in real-time live at the aircraft and trigger automated email-based reports, which are sent to both the MRO and the Operator. Once completed, Work Order data is immediately available in MRO-PRO for automated consolidated billing reports to be generated. What used to take weeks or even months can be turned out in just minutes.
The result is that the right data is collected with a high degree of accuracy and is available immediately to produce consolidates bills in just minutes. Further, emailed reports and accurate billing data nearly eliminate queries. The result is dramatically reduced slip. In some cases MRO-PRO could reduce payment delays by months and provide double digit percentage gains in revenue.
Get in touch with us if you would like to find out more about how MRO-PRO could help your Line Maintenance operation reduce its slip.