Working in the automotive repair industry can be a nightmare in terms of time management and work-life balance. At one time or another, we’ve all gone through periods of putting in 80-hour work weeks and barely seeing the light of day, much less our loved ones. Ever walk into your shop on a day off and feel like you can’t get out of there?
By David Rogers
Thankfully, getting core and part returns under control takes little more than proper processes and accountability, and you can ensure that that credit pipeline flows into your bank account instead of the garbage with very little effort. The only trick is to create a sentry that looks for leaks in three specific places in your return pipeline.
It was haphazard, inconsistent and fundamentally broken, and it meant that we weren’t getting credits and were literally throwing money away every month. This included some really expensive cores – engines and rack and pinions! Literally sent to the dump.
The first step in the process was ensuring that the tech knew about the core, and his responsibility to pull it.
Our solution more than 20 years ago was analog, but effective. When new parts went back to the bay for the repair, they were sent with the repair order that had red stickies flagging which parts had cores. It didn’t have to say anything more than “CORE CHARGE ON RACK AND PINION” for the techs to know their responsibility.
At the same time, that core return was added to a tracking sheet by the service advisor: which repair order, which part, which supplier, what dollar amount, which tech.
Once the core was picked up, and the advisor received the tracking slip from the driver, it was then the advisor’s responsibility to update that tracking spreadsheet with when it was picked up.
The only people who can accurately reconcile what needs to be returned with what was returned are the people on the front counter who oversee each phase of the return process. The more easily and transparently this process happens, the better you can ensure that parts and core returns go from the vehicle to the parts store in a way that ensures you get paid.
One day, after parting ways with that bookkeeper, while cleaning the office to prepare for a new employee, we pulled the desk away from the wall to find months – at least 4 or 5 months – of parts returns receipts from parts stores that the bookkeeper had hidden behind the desk rather than track. She knew that we weren’t paying attention and took advantage of us.
When the return leaves the shop, however, is when it’s most critical that good processes are in place. Because it’s at this point that your tracking spreadsheet does its most important job: making sure that you receive credit memos for all existing returns.
Which is the whole point in this procedure, of course: every person in the chain doesn’t only have to know their responsibility, they also have to be held accountable to fulfilling it through good tracking and measurement.
That’s because the final leak in the pipeline is ensuring that the credit actually shows up on the monthly statement, by reconciling all credit memos to the statement sent by the vendor.
This process isn’t complex. It doesn’t require sophisticated software or communication. And at the end of the day, many shop management systems can make this process even easier.
Which is ultimately the big takeaway here: the greatest and most sophisticated tools in the world don’t mean anything if the team isn’t accountable for using them properly, and incentivized to help the shop stay healthy and profitable.
Whether you’re getting returns under control to capture lost money, or trying to capture more profit each month, it starts with transparent measurement, proper procedures, and clear expectations across all areas of the shop.