Part II: Losing Money & Leaving More on the Table
This is the second installment of a four-piece series about taking the leap to digital billing and payments for private security details. If you missed Part I, please go back and check out how much department time is being lost manually billing for these details and how you can take a page from the Silicon Valley playbook to eliminate it (without going vegan or buying a Tesla). If you’re all caught up, this installment will focus on the department resources that are spent on detail scheduling that can’t as easily be returned to the department with a fancy bit of technology. First, we’ll identify the resources that are being spent, figure out how to calculate their cost to the department in dollars and cents, and then we’ll look at how a digital payment system can help you recover them by collecting a service fee added to officer’s hourly rates. Don’t worry if you’re not a math whiz, we’ve created a free service fee calculator to help you determine the right service fee for your department.
“Time is Money”
In the last article we broke down in detail how billing for off-duty details can be an administrative drain on department time and how automated billing and payment systems can help reduce or eliminate that additional workload entirely. But, we know some departments still allow officers to be paid directly by the clients they work for, so why should they bother to bring that process in-house with digital billing and payments? There are a host of answers to that question, but today we’ll focus on gaining the ability to recover the department resources that are being used during the course of scheduling and performing the work being requested.
Every organization has limited tangible and intangible resources that are constantly being used throughout the workday. Of course, this is the nature of any work environment, so how and where we use every resource tends to go unnoticed. However, when resources are being spent outside the scope of the work they are earmarked for, we should pay attention to where they go and make sure there is a plan to recover them.
But how did we get here?
Scope creep is a common term in technology and product management and it occurs when the requirements of a project continually expand causing a project to take longer and cost more to complete than originally planned. Another term for the same phenomenon is “responsibility creep”, which is far more fitting for this blog, and perfectly explains why police departments across the country spend their time and resources scheduling and dealing with private security needs. As we covered in the last installment of this series, off-duty police work provides tons of value to the department and community in many different ways, so naturally someone has to spend some time managing the process. In the past, that someone was the officer or officers who wanted to earn the extra money moonlighting, but with fairness and officer accountability becoming more and more important to law enforcement agencies, the responsibility to manage off-duty scheduling has crept into the department’s administrative office and has been slowly siphoning away resources ever since.
I know that scenario sounds bleak, but at the end of the day, having administrative control and oversight of the department’s off-duty police work is a good thing. As long as you can identify the department time that is spent reviewing requests, communicating with officers, and approving timesheets, along with any other resources being lost to scheduling or performing off-duty security, you’re one step closer to being able to get it back.
For departments that have an assigned off-duty coordinator, labor costs are pretty easy to quantify, but those calculations get tougher for departments with a more decentralized management process. Luckily, detail scheduling software solutions like ours are available to help cut the time spent scheduling in half or more with scheduling automation for either one of those scenarios. Whether your agency uses a solution like ours or handles the entire process manually, you should be able to determine a ballpark figure of how much time officers and coordinators spend on scheduling. Once you have that figure along with the average salary and benefits of those employees, you can calculate the current cost in labor that is being spent and should be recovered from the clients requesting the security.
The next area we need to look at is vehicle costs, and there are a couple different methods you can use to recover these costs. Some details may require a squad car or other specialized vehicle and will be specifically included in the vendor or client’s request. Another scenario is when departments issue officers a vehicle that will be used regardless of whether or not the client specifically requests the presence of one. Some departments recover these costs with a flat rate car fee added to the overall price of the detail per vehicle, or by adding an hourly car fee based on the annual cost of vehicle ownership. Either option is a perfectly good method of recovering vehicle costs, but if you are looking to include vehicle costs in your standard department service fee, you’ll need to use the latter.
Uniforms & Equipment
One last area that is often overlooked is the cost of wear and tear on any department-issued uniforms and equipment like radios, body cameras, or tasers. Many of these items have a shelf life and need to be updated, or replaced from time to time. These items can be broken down into an hourly cost of ownership just like a vehicle and included in your service fee.
Now that you’ve got an idea of the department resources that are used to schedule and facilitate private security details, you’ll need to somehow turn them into an appropriate hourly fee. In order to do this, you’ll need to figure out how many hours of off duty work your agency provides annually. If your agency is like most, producing an exact number of hours worked is easier said than done, but a rough estimate will get you close (When you download our free service fee calculator we’ll have some average figures for officer participation and total hours worked preloaded to help you get as close as possible). Once you have your annual hours you can simply divide the annual cost of all department resources spent on private security scheduling by the total number of hours worked to determine the hourly service fee needed to recover your department costs.
You’ll want to make sure this service fee is reasonable and doesn’t discourage clients from utilizing the department for their security needs. Luckily, detail scheduling software like hours can drastically reduce the cost of labor needed to oversee the process, reducing the amount needed to be recovered. Based on what we’ve seen from departments around the country that are already collecting a service fee, 10-15% of the officer’s hourly rate seems to be widely accepted and tolerated by the vendors requesting the security. Your service fee might need to be adjusted over time to ensure costs are being recovered adequately, especially if you are using estimates in initial calculations. Once you’re dialed in and you’re adequately recovering your costs, you should consider collecting some additional fees to help the department keep up with ever-evolving technology costs. As long as your fees are clearly communicated with the organizations requesting security and fall in those accepted rates, there’s no reason they can’t add funds to the department’s budget.
How does any of this pertain to digital billing? Without an automated digital billing system in place, collecting a service fee separate from the officers being paid by the client just creates additional administrative work for the department. This is the main reason why most departments don’t collect a fee. By using an online billing system like ours, your department fee is communicated to the client and included in their estimate when they make their detail requests. This completely eliminates any cash or checks needed at the time of the detail. Based on the department’s preference, invoices can be paid in advance, held in escrow, or paid upon completion. Once the officer’s timesheets are submitted and approved, the transaction is finalized. Officers are paid by direct deposit in 1-5 business days, depending on whether the details are prepaid or post-paid, and the department receives a check or deposit into the account of choice along with a monthly service fee report. This entire process is completely automated and paperless, saving clients the trouble of having to cut checks and saving the officers the trouble of having to cash them.
Has responsibility creep turned your admin office into a security scheduling operation? We’re happy to discuss the best way to let off-duty details put time and money back into the department rather than take them out. Still need more convincing? The next installment of this blog series we’ll discuss how using the digital payments simplifies income reporting for officers come tax time.