Tracking and Billing Materials in Collision Repair Adds Up!

Tracking materials and accurate billing for them in collision repair is often overlooked, leading to lost revenue for shops. While it may seem insignificant to account for small items like adhesive or primer, the cumulative impact can be substantial. Let's look at the importance of tracking materials, discuss the challenges involved, and offers a practical solution that streamlines the process.

The Hidden Profit in Tracking Materials

Many shops neglect to include materials like clips, adhesive, and primer in their estimates, considering them part of the "cost of doing business." However, this expense can be recovered if adequately documented. Estimating systems often do not include these items, but insurers are generally willing to reimburse shops when they are required for the repair and documented.?

While it may seem insignificant to forgo tracking small items, the cumulative effect can be substantial. In my experience working with an MSO, I observed that invoices for additional materials totaled around $40,000 in one year at just one location. Failing to track materials is essentially throwing them into the trash.

Simplifying Material Tracking

Tracking materials inventory is perceived as complex and time-consuming. However, it doesn't have to be. One approach is to estimate materials used based on the repair area. For example, let's consider primer. Knowing the repair area size and the consistent amount of primer used for that size, you can create an estimate line item based on your materials rate. This method can also be applied to other materials like adhesive, caulk, and foam. Once you know how far your product goes, you have the first step of an easy and repeatable billing system.

Importance of Itemized Billing

Accurate measurements and documentation play a crucial role in billing for materials. If the use of a product is not noted, it won't be billed. Proper documentation is also required for reimbursement purposes. Simple measurements help demonstrate material use effectively and ensure proper billing.?

Embracing digital measurement and reporting tools can significantly streamline the material tracking process. Suppliers like Kent and 3M both have inventory management systems that will account for these additional materials and even allow for the billing of partial units. That is especially handy when you only use a portion of an adhesive or caulk cartridge. It's critical to be paid for the portion of the cartridge used, as materials are never included as part of the repair. Leveraging such tools enables shops to document material use consistently and increase their chances of getting paid for every repair.

In the collision repair industry, neglecting to track and bill for materials can result in missed revenue opportunities. Shops can enhance profitability and optimize their operations by recognizing the profit that comes from accurate material tracking, implementing simple measurement techniques, and leveraging digital tools. Don't let valuable materials go unnoticed—start tracking and billing for them today to maximize your bottom line.