Inventory overage questions.

[sipps]

We just did my first physical after 15 months on the job. First, a little background. One had been done 6 weeks prior to me starting without an acting manager. New to GM, and never managed before. I knew we were going to be over. Pricing was off on several fast moving part numbers. Free/cost minus parts - the cost not accounted for, etc. I now reconcile with GL every month. Cost issues have been fixed. And, now recover as much as I can to 687. Well I sure as hell wasn't going to be short for my first physical. However, we were over. 23% over to be exact. Ouch, that's hard to do.

My question for all the experienced parts managers is:

Do you get paid on the overage? The decision hasn't been made. But, it's looking like my guys aren't going to be paid on it. Just want to know if I'm fighting for something that they normally wouldn't get.

I appreciate all the feedback. I know what errors I made, and have corrected them going forward.
Thanks for all you guys/gals do!

[partsman1]

If you get paid on overage be ready to get deducted on a shortage. I don't get anything for over or short.

[Zep33]

yeah, some look at overages as just as bad as a shortage. Definitely shouldn't be getting paid for it. While it's better than being short, it's still not a good thing

And if you're that far off, something might pop up down the road that explains why it was so that far off.

[PartsPlant81]

No you don't get paid on overage. Most of it is because of appreciation. Unless you have major internal problems I believe the benchmark is 2% for an acceptable amount to be over.

[marko65]

YES . YOU GET PAID ON OVERAGE. A PERCENT ON OVERAGE, FOR ME 10 PERCENT. IF YOU GET PAID ON 687 OR 688 YOU SHOULD GET PAID ON THE OVERAGE. HOW I EXPLAIN IT TO MY GM(DEALER PRINCIPAL) IS THAT I DONT ALWAYS TAKE THE PROFIT ON A DAILY BASIS I WAIT FOR THE OVERAGE AT INVENTORY TIME TO GET PAID. IF YOU HAVE A SHORTAGE IN YOUR INVENTORY THEN YOU ARE NOT DOING YOUR JOB AND SHOULD BE LET GO, ESPECIALLY MORE THAN ONE TIME. FOR US HERE 10% OVERAGE IS USUALLY THE NORM. PARTS MANAGERS ONLY GET PAID THE OVERAGE NOT THE COUNTERMEN

[PartsPlant81]

YES . YOU GET PAID ON OVERAGE. A PERCENT ON OVERAGE, FOR ME 10 PERCENT. IF YOU GET PAID ON 687 OR 688 YOU SHOULD GET PAID ON THE OVERAGE. HOW I EXPLAIN IT TO MY GM(DEALER PRINCIPAL) IS THAT I DONT ALWAYS TAKE THE PROFIT ON A DAILY BASIS I WAIT FOR THE OVERAGE AT INVENTORY TIME TO GET PAID. IF YOU HAVE A SHORTAGE IN YOUR INVENTORY THEN YOU ARE NOT DOING YOUR JOB AND SHOULD BE LET GO, ESPECIALLY MORE THAN ONE TIME. FOR US HERE 10% OVERAGE IS USUALLY THE NORM. PARTS MANAGERS ONLY GET PAID THE OVERAGE NOT THE COUNTERMEN

Wow. I would love to have been the manager in your dealership when I was almost $12K over a few years ago lol.

[mdishong]

I was dinged for a small SHORT FALL when I took over as parts manager many moons ago. "Ever since" it goes as an inventory adjustment and that's money in my wallet.

[FixedManager]

Yes, paid on overages or deducted on shortages.

[hoorulez]

When I saw 'not paid on overages' I immediately wondered (aloud) why have so many drank the 20 group Kool-Aid? When I came to my present employer a few years ago, I found out I didn't get paid on overages. I argued profit is profit, no matter the source, and I get paid on profit. He played the 'I'm the owner card', and we left it at that Our over 12 month list was like 10 parts .
The dealer before that paid on overages and each year for like 5-6 years it kept GROWING. 25k the first, 38k the next and so on. The last year it was like 100k+ OVERAGE and I got paid on that (after we did some hefty 'write-offing'). I left after that year. I contended that the office didn't apply the last years overage to the inventory and that could create the snowball overage. The year after I left they were 30k+ under. whoops.... BTW, I was NOT the manager in charge. I warned 2 (TWO) PM's during those years that there was no way a dealer with 300k inv could be that far over, ever!!

If you are not getting paid overage on inventory you better be getting some other worthy perk.