Warranty clerk productivity

[David]

I recently attended a Ford meeting on the subject of the downward trend in warranty repairs. This got me thinking about my own warranty clerks productivity. I came back to the store and computed the average months number of Service Contract, Warranty Mechanical and Warranty Body RO's that we write. That number was 190 in our case. I then calculated the number of hours my warranty clerk has available to complete these RO's and was surprised to find an average of .9 hours per RO based on a 40 hour work week. Of course this does not include any time the accounting office takes to account for this money. This seems extrodinarily high to me. Am I missing something or is my warranty clerk extremely inefficient?

[scotstrong]

Don't forget to allow time for reject correction and resubmission. Also, does the warranty clerk reconcile the credit memo against the warranty schedule? Does the warranty clerk have ANY other tasks such as booking repair orders or answering phones? Very rare to see a store where that would be the ONLY thing that person does.

Scot Strong

[Ronc925]

The average dealer probably gets somewhere from 60-80% paid on first submission. I don't know about Ford. But if that is all the person is doing something is wrong.

Another factors is are you set up for download from the RO direct to DCS for claim submission, or does everything have to be manually typed?

Another way to look at it: Outside vendors usually charge 3-5% of the value of claims paid as their fee, with a cap for high volume stores. Is her pay, including the benefit factors in this range?

[robc]

The WA probably is doing other tasks during the day besides just getting those claims paid. My personal Ford benchmark (and this is just my guide) is 25 claims a day. That includes all warranty, recall, ESP.

But I am biased from working at a warranty processing company many moons ago. In that atmosphere the coding and data entry positions were separated. Our goal was to code 100 ROs a day, and the data entry person could handle the work of three coders. So I see a stack of 25 as totally doable if there aren't a lot of other task pulling at the WA.




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** Rob, Editor WD&S **
Help is only a message post away!
robc@dealersedge.com

[David]

My warranty clerk reconciles claims with the warranty statement but she does not answer phones, write RO's etc. She does look up labor ops, handle resubmissions and corrections and she does payroll for techs once every two weeks. Since my total warranty sales are about $17,000 per month it's looking like I should consider outsourcing this - 5% would be $850 per month.

[Ronc925]

David,

If you are going to go with outsourcing you need a company with an excellent record. They have to work well with the manufacturer(s) as well as be your business partner.

They need to be accountable for what doesn't get paid (warranty receiveables and write offs), and be willing to advise you on how to improve your processes that prevent claims getting paid-like poor tech notes and documentation.

A bad company could get you into an audit by getting things paid that do not have the documentation to support a valid claim, and then walking away during the audit.

Get it all in writing on a contract, breakable by either party on 30 days written notice or imediately upon any violation of the warranty policy manual for your manufacturer.

The same holds true if you keep it in house.

From your Dollar amount of warranty, that should be a 2 hour a day job 5 days a week max, in my estimation. But, were they trained, or thrown into the job and are learning on their own?