Open R/O's

[Mike Vogel]

I believe that the end of month work in process should be less than one day's worth of ro's written. If your store writes 25 ro's per day you should have less than 25 ro's on your work in process at end.
In our store we write more than 3000 ro's per month and end of month we average 75 ro's or less open. I run work in process 3 times per week and review with my staff all ro's that are open more than 2 days. If your manager stays on top of his work in process it makes the end of month so much easier.

[Old Irish]

500 is extreme.

How many are warranty ROs that have not been closed into accounting?

How many are "no charge" tickets just waiting for someone to push the button and close them into accounting as a no-sale?

A lot depends on how the shop operates. For instance, we're in the middle of out fleet sales season--over 1000 units--and do of lots of upfitting on most of them. We write an RO for the "upfit" work as soon as the unit hits the ground even though it might not be worked on for 3 weeks.

Has there been a change in personell, job duties, or paper flow?

DD

[JustBob]

Open RO's should be represented by cars still in your possession. I realize that this may cause a problem with the all too common practice of giving a car to a customer while waiting on parts and keeping the RO open. If the customer has an accident and the attorneys go looking for deep pockets the dealer is in the loop. This may seem extreme but John Edwards made $325 million on what seems extreme to many people.

On many occassions I have seen open RO's that represent over a months business. You can be pretty certain the Tech was paid and the parts are gone. Open RO's are a big bucket of your money loosing value and becoming less collectible each day they sit.

Might want to look at the names on those RO's once had a dealer that discovered the service managers family had over 25 open RO's - an off the books loan.

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Have a tremendous day
Bob Britting

[This message has been edited by JustBob (edited 05-17-2007).]

[Strap22]

I hope those open tickets only represent vehicles in your care. If they have an accident while you have an open RO that can be a whole new set of problems. Hands on every car to every open RO. If the vehicle is gone the ticket should be closed. Don't let your Service Dept. put the whole store at risk. Check your local, state laws.

[Old Irish]

"If they have an accident while you have an open RO that can be a whole new set of problems"

I know that lawsuits can take some strange turns but I am struggling with the idea that an open RO will somewhow divert accident liability from the driver of the automobile to the delaer holding an open repair order. So, customer picks up his car at 5:00 pm today and has an accident at 9:00 pm....and the dealer is brought into the loop because the repair order isn't closed into accounting until the next morning? What has the world come to? Not that mine represents the final word, of course, but in all honesty I have never heard of such a scenario in my 29 years in the business. I'd like to hear from anyone who has and have them explain to me the twisted logic !

And, let's define "closed repair order". Are we talking about simply generating a customer invoice, or actually closing the repair order into accounting?

For instance, on completion of a warranty repair a customer invoice is printed. If there's any "customer pay" on the ticket, the money is collected and on that day (or the next, depending on timing) the customer pay portion is closed into accounting. If there's no money involved the customer pay portion of the ticket is closed as a "no charge".

Now, depending on a variety of factors, the *warranty* portion may not be closed into accounting at the same time and will remain "open" until your warranty clerk or outside warranty company completes the process of submitting for payment and closing it into accounting.

Cheers
DD

[JustBob]

Old Irish and the younguns also,

My reference to Open ROs means - still held open by Service, not closed to Accounting or Cashier in the case of a CP ticket, or more importantly a customer copy was not generated and given to the customer whether CP, Warranty, or Internal indicating the work was completed. The most common occurrence probably being waiting on parts, but also the Service Manager floating a loan or just pure malfeasance or failing to complete his assigned tasks. Simply put if the vehicle is gone the RO should indicate the work was completed and customer given/signed a copy. I think we have the same idea of what should not be occurring, just a matter of definition of terms.

In the past 15 years I have been involved in around 300 new DMS software installations and have seen Open ROs that are months or even years old representing 100s of thousands of dollars usually accompanied in accounting by Warranty Receivables and Work in Process schedules that are extensive and old and also represent 100s of thousand of dollars. Art_Mopar states these dealerships need more then just a new Parts Manager well said Art. Most any decent DMS would provide the Dealer Principal this information with a few key strokes but many never look above the bottom line on the Income Statement let alone at the Balance Sheet.

Hopefully this explains my definition of an Open RO and how such an occurrence could trigger claims and potential liability if a car is released without an indication the work was complete. However never underestimate the twisted logic of a hungry attorney, and what the world has come to! If the driver does not have insurance or deep pockets they look for them. Even if you prevail in court it can be quite expensive doing so.

I recall a question that once appeared in Mechanics Illustrated in my younger years:

Reader I have been advised that if my car is stolen and involved in an accident I could be held liable is this correct?

Tom McCall(sp?) Yes that is correct you can be held liable for damages even is you did steal the car you are driving.

Lawyers and the courts can twist your works and your intentions.


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Have a tremendous day
Bob Britting

[skittlecar1]

Say a customer has GMPP with a $100 deductable and comes in for an exhaust leak. Tech diagnoses problem and orders parts. RO should be closed? Warranty submitted. Customer returns a week later. New RO. Do they owe another $100?

[btk]

The only cases I have seen with open RO's have dealt with Lemon Law and days out of service. Car leaves without customer signature and a part is ordered and repair order is held open because tech had a lot of time on diagnosis. Customer returns 2 weeks later for part to be installed. Repair order is closed and car is fixed. Months later, Lemon Law is filed and service repair orders are provided-they look at open and invoice date on repair orders and it looks like car was out of service for 14 days on that repair order. Hard to prove otherwise, verbal doesnt cut it at that point.

[Old Irish]

"Simply put if the vehicle is gone the RO should indicate the work was completed and customer given/signed a copy."

That makes perfect sense as it indicates that the custody of the vehicle has transferred from dealer to customer. But...that's not the same a *closing* a repair order.


" I think we have the same idea of what should not be occurring, just a matter of definition of terms."


Agreed. But, to fully answer a question we have to be on the same page with definitions. The scenario described above doesn't necessarily mean a repair order has been *closed into accounting*.


"Say a customer has GMPP with a $100 deductable and comes in for an exhaust leak. Tech diagnoses problem and orders parts. RO should be closed? Warranty submitted. Customer returns a week later. New RO. Do they owe another $100?"


If nothing more was done that ordering parts I would close the repair order into accounting as no charge. If there were several jobs on the repair order and, let's say, only one remains incomplete I would *invoice* the repair order, collect the deductable, release the vehicle with customer's signature and then hold the ticket until the part came in, at which point I would finish the job and create a new invoice (from the same repair order, mind you) for the customer when the last job is done. This would prevent the common problem of deductables that you mention.

I think the important issue is that open repair orders should be regularly monitored carefully to ensure nothing dishonest is going on. Just take the list of open ROs and ask the advisors and/or serv mgr for an explanation on randomly picked examples....and see what happens.

Cheers
DD

[cantfind12]

This is a very academic question and I agree with Old Irish's overall take. What constitutes an "open RO" and why is it still open. I can add the scenario of "split RO's" into the mix. C/P, Internal and Warranty all split onto different repair orders by the cashier and closed by their respective "handlers." Customer pay is easy. Collect the money note the payment type and close it. However who closes warranty and internal is open for discussion. Internals are usually handled by someone who knows how and why they are paying for it....usually the service manager. Warranty poses an interesting dynamic. Who is best equipped to "book" the time and why. The most qualified person to apply a code describing the repair is the technician who performed the work, however, that is considered paying themselves and is a conflict of interest (legally and ethically). The service advisor has a mixed involvment and being the "go-between" for the customer, dealer and factory can lean towards either aspect depending on the situation. The warranty administrator is often the least technical but the most knowledgeable about the manufacturers nuances, dealer concerns and how the DMS vendor interfaces. All of these concerns roll forward and backwards into Open vs. closed RO's and the effects. Having worked for 3 dealer groups, several vehicle manufacturers and one particular system vendor I can tell you it has been humorous and enlightening to hear each side and the various "takes" on all the variations. The one course I will always emphasize is the consideration for the fact that a Repair Order is a legal contract and in the legitgious world we live in I would always Err on the side of safety from the legal standpoint. Always recall the irreverent yet cautious words of Harry "Breaker" Morant at his execution during the Boar War....."this is what comes of Empire Building."