The nvisin tool built around this: Rental Manager.
How it works
Most rentals use one of three cycles:
- Daily or weekly, common for tools and machines on short jobs. Charges usually step up: a week often costs about three to four days' rent, and four weeks less than four separate weeks.
- 28-day (four-week) cycles, common for equipment rented long term. There are 13 of them a year, so a customer on a 28-day rate pays 13 times, not 12.
- Calendar month, common for storage containers, office trailers and other units that stay on site for months. The charge falls on the same day each month, either the day the rental started or a set billing day for every customer.
Partial periods
Decide up front how the first and last periods are charged. Some companies bill a full cycle whatever happens. Others prorate: a monthly rate divided by the days in the month, times the days on rent. Put the rule in the rental agreement so the final invoice isn't a surprise.
Worked example
A portable storage unit rents at $160 a month and is delivered on March 20.
| Billing rule | First charge | Then |
|---|---|---|
| Anniversary date (bill on the 20th) | $160.00 on March 20 | $160 on the 20th of each month |
| Set billing day of the 1st, prorated | $62.97 (12 of 31 days) | $160 on the 1st of each month |
Both are fair. The second is easier to run with many customers, because everyone is billed on the same day.
Common mistakes
- Not saying how the last period is charged. It's the most common billing dispute when a unit comes back.
- Mixing 28-day and monthly rates. Quote one or the other, and say which.
- Billing from delivery when the agreement says from pickup ready, or the reverse. Use one start date everywhere.
- Losing track of off-rent dates. A unit that was called off but not picked up yet still needs a clear rule. See off-rent.
Related terms
- Off-rent (off-hire): Off-rent, called off-hire in the UK, Australia and parts of Canada, is the point at which a customer tells the rental company they're finished with a unit and the rent stops.
- Rental agreement: A rental agreement is the contract between a rental company and its customer for a unit: what is rented, where it goes, the rate and billing cycle, who is responsible for damage, and how the rental ends.
- Rental utilization rate: A rental utilization rate is the share of your fleet that is out on rent, either right now or on average over a period.
Further reading
- Rental Manager: the nvisin tool built around this