Coupons

[cain12]

We have several coupons out right now, and from I know almost all discounts get charged to service (i.e. a $169 trans flush for $149, the $20 gets charged to service). Should this be 50/50? How do you do it?
Also, the actually printing came to a couple thousand, who pays for that?
Thanks!

[Old Irish]

Service generally makes more profit so most would say they should bear more of the expense.....in terms of the couple thousand dollars it took to create the mailer.

Discounts? In my opinion repair orders should be edited back to reflect the discounted price, that is, take the discount "off the top" rather than "off the bottom". In your example the parts might be billed at $8.00 less than the normal amount and labor billed at $12.00 less....just throwing out numbers here.

Cheers
DD

[oldsfan]

The service department makes it's own profits on parts [parts transfer] so it is understandable the discount should come from
service. If the coupons are generated in a service only mailer, service pays as advertisement. If a store flyer has service coupons in it split the cost between departments for the printing. Then the age old question where to charge the discounts? Advertising, policy or off the top?

[gordyw]

I took those types of advertising expenses for printing of the coupons or mailers as well as the discounted amount from the coupons and at month end do a journal adjustment. Since service did make more of a profit on the itmes sold I would charge 2/3 to Service and 1/3 to parts department billed to advertising. I never back off the cost of labor or parts. I would not want to hurt my effective rate or parts gross by adjusting down discounted prices.

[Old Irish]

Where do you take your journal adjustment? That is, to and from what accounts, specifically ???

I know opinions vary on this....but I think the only proper way is to adjust your billing amounts. Showing a higher sale amount...and then writing part of it off somewhere else...just to show higher (but false) effective labor rates or gross percentages at a higher level is just skewing numbers.

But...with all the 20-group heat I've been getting lately....I've been sorely tempted myself.

<grin>

Cheers
DD

[partsmanager423]

Since service typically makes more revenue off repair order specials we split it 65/35.
Its called teamwork