Warranty proficency

[Old Irish]

"Then when the credit shows up, the WA will modify the RO to fit the credit which shows no aged unpaid claims and no policy adjustments."


I can see where this could be a problem as mistakes (or laziness) could be very easily hidden from view, but I can also think of *some* situations where it might be called for.

Some warranty claims (or insurance claims, or service contract claims) are rather complicated. I see no point in closing a repair order into accounting "at full pop"...where you've paid a tech and recorded a sale at what might be a inflated (ahem....wishful thinking) amount....only to then have write-off when you come up short. Not to mention paying commission on inflated sales and gross figures !

That would similar to closing at car deal at full MSRP ....and enjoying a huge gross-per-unit-sold.....and then charging off the shortage to advertsing or some other expense account.

For example, we do lots of mechanical work for insurance companies (via our body shop)at a labor rate that is often $30-40 less per hour than our standard mechanical labor rate....along with some very tricky parts pricing requirements. We routinely edit the ticket to match what we are paid, as I certainly don't care to show (what could often be) a several hundred dollar write-off purely for the sake of showing a maximized gross profit.

The worry, of course, is "How much and how often, and who is doing it?". It wouldn't take but an hour or two a month to review closed repair orders for suspiciously low sales amounts (a veteran SM will spot 'em in a minute). In fact, I regularly run a "detail" listing of closed tickets (all pay types) and look for unusually low (or even high) grosses. Similarly, if technicians "flag sheets" show sudden decreases or increases in hours flagged by the warranty admin, I'd start nosing around a bit to see what's going on.

A bigger concern would be a *cashier* editing repair orders.....lots of particularly ugly possibilities there.

Cheers
DD

[helpers]

The GM BAM board is a bulletin board set up by General Motors for Business Accounting Managers on the GM BAM Council website.

I agree with Irish in that tickets should not be closed out with erroneous sales amounts - if/when we see those changes on the adjusting journal entries (and we are talking factory warranties here), that's when the service manager has his chance to counsel the warr clerk - any overpayments to employees are then charged back. If you see this happening on a regular basis, or have unusually large chargebacks, it certainly would warrant an investigation.
We have separate schedules for factory warranty and outside insurance work to differentiate between the two. Factories pay much quicker than the insurance companies we work with, and we can separate the trend. Not all managers are seasoned veterans, and reviewing ro reports is always a good idea, whether experienced or not. It's also a good idea to have a 2nd line of defense: make friends with your office mgr or controller, and ask for a 2nd pair of eyes. My first month on the job here, 10 years ago, every manager had taken me out to lunch (I'm sure at the dealer's request), and it made a huge impression on me that we indeed were a team. I'd go to bat for any of them.

[Old Irish]

Teamwork helps

Its really nice when the controller/business manager can be considered a "go to" person for advice, support, helping fix something you've bollixed up, etc.

To be honest I've known some over the years who were so cranky and unpersonable that it made life difficult. And they wondered why others in the dealership would do just about anything---including burying mistakes---to avoid getting chewed out, scolded, talked-down to, etc.

Cheers
DD