The Money Shift

There are many different ways to look at the operations of a service department.? Between the financial statements, different accounts and numbers to watch, everyone can have a different focus.? This could be different from an owner, general manager, manufacturer rep, fixed operations director and others.? Even though people will want to look at different accounts and will have their business measured in different ways, the net number and hours turned in your service department are what matters.

This business can either be straight forward or constantly skewed to cause grey areas: Service policy, shop supplies, company vehicle, miscellaneous, unapplied labor, training and more.? What account should have what in it?? What numbers matter?? Effective labor rate, hours per repair order, customer pay hours per repair order, customer pay labor gross percentage??

This business is littered with different tricks of the trade-not all of them good. You try to create a shop supply ticket by hiding certain parts you had to take care of to avoid a greater service policy.? You try to overcompensate on an express techs hourly wage in the DMS so that you can cut down on unapplied labor.? You constantly add extra hours to used car inspections to compensate for lost time and inefficiencies from technicians.

Every time that you shift money to make numbers look good, it does not help: It is a waste of time and throws smoke over the real picture.? If you try to overcompensate on your hourly express technicians rate in your DMS, you are only going to lower your labor gross percentage.? If you start to make a shop supply ticket that you throw shop supplies on or other items needed such as a part replacement, you make it so that you can’t track things appropriately.? If you do not flag your express technicians just to increase your labor gross percentage, you increase your unapplied labor.

You need to be able to track what is really happening in your service department.? You need to start to play offense and be strategic with getting work in the door and getting the work through the shop.? Start to get out in the shop more and see who is getting what jobs and who functions best with what jobs at what times.? This will not only increase you shop proficiency, but it will increase your teams income.? At the end of the day if your team is happier, they are turning more hours, selling more hours and the department is doing well.? When this happens there is no need to play the money shift game.? Do the business right, make it clean and you will succeed.

-Chris Schaubert