Get Ready for 2026 with Consolidated Data and Proactive Planning

So, how do HVACR distributors prepare for a new year when market conditions continue to change? At Phocas, we currently have over 55 HARDI members on the books using up-to-date data or FP&A approaches to give them the confidence to adapt. Budgets and inventory forecasts provide clarity about what’s happening now and how different scenarios might play out.

What market conditions are likely to continue into 2026?

HVACR distributors can expect much of the same external operating conditions next year. You’ll be juggling a familiar mix of pressures like rising costs, labor shortages and regulatory shifts (including ongoing tariffs). And of course, customer expectations will continue to change and need to be met.

Let’s begin with labor pressures. There is a skills shortage across the HVACR industry globally with not enough qualified technicians entering the workforce. For distributors this translates into staffing challenges in warehouses and branches and potentially higher wages to attract qualified people or paying overtime to those working longer hours.

The HARDI 2025 State of the Channel Report that surveyed thousands of people working in HVACR, flagged extra costs from tariffs and inflation as the main threats to their businesses. Based on current US government directives and the state of the economy, these measures will be an ongoing concern in the coming year. Margins are tight and volatile costs will continue to make planning more necessary.

Sustainability regulation is gaining momentum. The refrigerant transition, electrification and energy efficiency standards are influencing what products American distributors are selling and stocking. This means your customer demand and product mix will shift further as more customers choose energy-efficient systems. Sell older, non-compliant SKUs quickly, and start pricing and stocking sustainable options if you haven’t already.

For all HVACR distributors, inventory risk is ongoing. With longer lead times still in play, distributors need data-driven strategies that use seasonal insights to forecast product demand.

These challenges are real and ongoing so we’ve pulled together some data and planning tips to help you position your HVACR business for success in 2026.

Data and planning will serve you well

In volatile markets, planning with reliable data helps to provide alternative options to service your customers. We’ve seen this firsthand across our HVACR distributor customers – those who use consolidated data platforms and forecast regularly are resilient.

Here are two common patterns we’ve noticed in the last two years. The first is branch-level visibility makes local teams more agile and gives them more confidence. When branch managers have clear dashboards showing margins and stock availability per store or state, they can address stock issues much faster.

The other win is the use of scenario planning. This technique allows distributors to manage profitability with more control. Those who model (base, high, low) tiers of ‘what-if’ cases for margins and labor costs are better prepared to negotiate supplier price increases or know their limit on overtime costs. We suggest finance teams stick with three or four of the most likely assumptions, which are easy to calculate in Phocas. For 2026, Phocas customers are already modelling for increasing costs cutting into their bottom line.

Happy Phocas customers and HARDI members

Over 55 HARDI members integrate the Phocas BI and FP&A software into their industry ERPs to they can plan, analyze and grow.

Johnstone Supply needed a way to view the bigger picture as well as know the individual performance of its 6 branches. By giving branch teams access to their own reporting, they empowered staff to see profitability and inventory positions each day. Instead of waiting for end-of-month reports, branches adjust purchasing when required, improving customer support and growing sales.

At Gustave A. Larson Co, the team leverages ERP data as well as call center logs, IT helpdesk records and weather data to plan ahead. Demand planning which required multiple reports and manual analysis is now available for everyone helping align the purchasing team with actual demand.

Both cases highlight the positive impacts of planning and sharing results across the business as budgets versus actuals. When branch staff and purchasing teams can see how they are performing, they can work more effectively and can serve customers with greater confidence.

So, what does it mean to be data-ready for 2026? At Phocas, it’s about planning as one business. Finance, sales, operations – everyone plays a part. When teams work from the same data and contribute to planning, they stay connected, engaged and accountable for results.

You start by bringing all your information together. Most HVACR distributors have valuable data spread across multiple systems like ERP, finance and inventory but it’s often disconnected. When you consolidate that data into a single platform, it becomes far easier to see the full picture and act on it quickly. From there, build your budgets with the help of different parts of the team across sales, purchasing and branches and define the important scenarios that drive your business.

Once your targets are set make sure everyone knows about them. The real power comes when everyone knows how they are performing against budget. Equip them with the right tools they need to carry out scenario planning each quarter. The more regularly the finance team revisit your assumptions, the more agile and prepared your business will be for whatever 2026 brings. We hope it’s a great year for you all.

The Phocas team look forward to seeing you all at the HARDI Annual Conference in Las Vegas from December 8-11. Meet us at booth #410 during the Booth Program.

Want to see Phocas in action and how we can help your business with consolidated data and proactive planning? Book your free, personalized demo here.