FORCE CLOSE RO'S

[stevet]

We are on R & R. Does anyone out there force close an r.o. that is not picked up by customer at end of month. I've got $15,000 in r.o.'s that will not pick up before end of month and my ofc. mgr. does not want the headaches of having to track them if I close them before the cust picks up.

[MaryG]

Steve,

As a controller, I can understand both sides of this story but need to side with your office mananger. While I understand that you want the profit in the month it was produced, the added expense (and headaches) of ensuring that all of them are collected really is a concern.

It is so easy at that point in time for somebody (ASM, cashier, GM, etc.) to say to the customer when he actually comes in to pick up, "we pushed this through as a charge for you so you don't have to pay now, you'll receive a statement in the mail. Here are your keys, have a good night." The odds of collecting that go straight down the tubes and you will probably find you have more writes offs than you normally would. I'm not saying that it is a guarantee, just a strong possibility. If you are large busy store doing this, you may actually need to hire another body (part time) to keep track of these and chase them down. Because you absolutely, positively will have to chase them down. Been there, done that, it's not pretty and I personally will not agree to do this in my store again.

In many stores, at the point that the ticket is "closed" it then becomes a problem of the accounting office. The incentive for the service advisor to get the customer in and the vehicle out is essentially gone. He has the service mgr off his back because the open ro list looks good. And his pay plan is probably based on posted sales so he is going to get paid on the ro now that it is closed.

I would be extremely careful if you were to decide to do this. 1. Put the fear of god into the ASMs and cashiers that NOBODY leaves without paying. 2. Follow up daily with the office and get a printout of the schedule (separate from the "normal" parts and service charge customers - very important). DAILY REVIEW THE SCHEDULE AND ANY COLLECTION NOTES! 3. Park these vehicles in a separate part of the lot and two to three times a week do a hands on hood with the schedule. If anything is missing, the office must be notified ASAP.

Good Luck.

[fburrows]

Steve:
The store I ran closed every RO at the end of the month once upon a time. As the Service Manager I stopped the practice even though it meant one poor month. Closing the Ros was a disaster because it took everyones focus off those Ros. The tickets sitting open in the tub need everyones attention especially if they are over a couple of days old.

Sooner or later these tickets need to be dealt with and if they are buried as a receivable for 30 days it just makes each problem more difficult to solve. It is a good thing that the Service Advisor does not get paid until the RO is closed. You want them focused on closing these so everyone can get paid. I agree with Mary. Dont even think about closing them until they are paid.


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Frank Burrows ABS
fburrows@absdata.com

[This message has been edited by fburrows (edited 04-26-2005).]

[johnny o]

Service adivisors ask at time of ro write up ... how will you be paying for this ? ... if by credit card ask for the card information in advance. This way these ros can be closed.


Hotels and many others ask for payment information ahead of time. For many this may be a convience as they can pick vehicles up after hours.

[3760Guru]

I also have to side w/ MaryG, why "rob peter to pay paul"? Many shops do not force close RO's and use the not closed, not paid technique. If the RO isn't posted, it usually won't hit your advisors' performance report, and therefore won't be calculated when it comes time to figure comission. If you make sure that there is an understanding that the advisor is not paid until the vehicle is picked up & paid, you'll create you own in-house "collection" department. Depending on the $ on the ticket, the advisor will have an incentive to get the customer to pick up the vehicle.

[stevet]

OK. I figured the response would be as posted. I agree with everyone's comments as out of sight/out of mind pertains here. I was just hoping for some magical solution that would help boost a soft month. Thanks for your input everyone.

[fburrows]

Steve:

Just focus on the "Record Month" that you can have next month!!



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Frank Burrows ABS
fburrows@absdata.com

[coyotekid]

Ok, I'm going to go against the grain here..
I've done it both ways, and I'm here to tell you that I MUCH prefer closing the tickets at the time the work is finished... NOT when it is paid for. We close EVERY RO when it is done and every RO closes to the cash schedule. The cash schedule is reviewed on a daily basis and in this way the ro is tracked. The tech gets paid, (not his fault if the ro wasn't paid) and in the 6 years I've been doing this, I have NEVER lost an RO or had one not paid for. Previously, I had to monitor whether it was paid for and when and then make sure it was closed.. I much prefer closing every ro when done...