reconciling b/s paint and materials inventory

[Hank D]

There doesn't seem to be a really good way to keep track of body shop paint and materials and reconcile with the inventory account. Annual inventory leaves you wide open for big +/- adjustments, monthly or even quarterly inventory is a real pain. Who's doing what and how?

[Doug]

Yes, this is a real pain and we've tried a number of ways with no sure-fire solution. We bought a paint measuring system that inventories paint and it helped somewhat. Also, getting painters to understand importance of noting EVERYTHING they use will help if you can get 'em to do it. Bottom line ? For us, we make every effort to be accurate in costing paint on RO's but if uncertain we always OVERCOST. We make inventory adjustment about every three months and almost always have a positive adjustment but, of course, month to month our GP on paint doesn't look so good.

[sallen1]

One idea I have not tried but is supported by my 20-group moderator is where the body shop people 'own' their inventory. Kinda foggy here but the details I remember are:

1) Figure how much material should be used doing the work, i.e. how much $$ per car, hr, etc. and come up with a monthly total.

2) Credit that amount to the tech and tell them to purchase materials from your selected supplier.

3) Any amount not spent is given to the tech.

I see the beauty here because the tech is motivated not to waste material. Also, inventory is no longer the dealership's problem and I'd bet the tech takes care the stuff doesn't get lost.

Anyone out there try this?

Scott

ps. The reason we have not used this is our supplier does the inventory reconcilliation with the purchasing office every month.

[Alan Nicholson]

Our painters are allowed 80% of the materials per estimate and line techs 20%. For paint only repairs the painter is allowed 100% of the materials. Each tech purchases all of his materials and if the tech exceeds the amount allowed on the estimate the excess is deducted from his labor. The tech is also flagged labor if all of the material allowance on the estimate is not used. If the painter needs sandpaper he is sold one complete box etc.

We allow the tech to bill materials to his RO not to exceed his labor and material portion of the the repair. Our tech may have two Repair orders with no labor and four with all labor and no materials. It all comes out in the wash. The point is he now owns his materials and will have to purchase his next box of sand paper. He becomes careful of even one roll of tape.

Our materials are stored in our bodyshop parts department on consignment and we are billed weekly as they are restocked by our supplier and parts counterman. We have no investment.

All materials are sold at cost plus 25 for a 20% gross.

Have not inventoried paint supplies in 15 years but do remember the nightmares and the write offs....

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Alan1149@aol.com

[mntanadave]

To keep track of Body Shop paint and materials was really a very simple process. We put our parts manager in charge of it.
Parts managers are the inventory controll specialists of the dealership. The paint mix system will track paint for you if the painters use it. We threw out the measuring sticks so they had no other way of mixing.
The parts dept personal pull a inventory every month. The other materials are set up in a seperate source in the computer system
(R&R) and inventory is controlled threw the normal systems. This has increased profit in the sup. account by almost 50% and it is easier to get the insurance companys to pay when you have a read out of all the material used on a specific job. Remeber they respect what you inspect.