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Keeping up with Accounts Payable (Parts)


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Hey all,

 

Looking for some ideas on how everyone is managing their parts charge accounts. Specifically, how are you tracking your receivables and returns? Every order we make with our supplier comes with one page minimum, not counting if the part has a core charge, which is often times another page. We get a parts bill once every 2 weeks, when this comes we send back all of our returns for credit. My main concern is making sure we are getting all the credits for our returns/defects/cores. Our parts house leaves us a return book so that our service writer can fill out the slip as the parts are placed on our return shelf that way we know for sure they are getting written up correctly and we can make sure that a new part return isn't only getting returned as a core.

 

We are getting hundreds of slips of paper every 2 weeks and it is difficult to manage (this is just from our main supplier). When the invoice comes, we have RO #'s as our PO but even this doesn't help with returns because if there is an RO # it doesn't indicate if we received the wrong part and had to return it or if the customer calls and cancels the repair etc. I am just looking for a better way to track the bill that way when the invoice comes in I am not just paying it but instead comparing it with my totals and ensuring they match.

 

I know some shops that have someone who manages just their parts tickets full time but my shop is not set up that way and currently this is not a possibility.

 

Any ideas?

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We had a problem where the parts drivers forget the return slip book. So a part gets billed and we have the slip. Then we return it and there's no slip. They forget to issue a credit. My wife assumes the part that didn't get billed or returned is inventory or a consumable when she checks the monthly invoice summary. No way to account for this type of nonsense. Now the rule is no return book no returned part , come back with it .

 

As far as accuracy how many overcharges do you guys get ? Besides the returns the parts stores have been 100% the last few years. Almost seems like a waste of time to spend hours double checking their work.

Edited by alfredauto
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I have a pile of invoices and return slips that I go through and check against the bill my parts supplier sends me. We deal mostly with Eastern Auto Parts here (Bumper to Bumper) and I gotta tell you, in 5 years that I have been checking their bills I may have found 1 or 2 mistakes. They have good systems in place and me checking the bill every two weeks has worked great for me.

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I've developed a shop parts "return/core" form. it is, simply has the vendor, part number, date, type of return..core, new, warranty etc. all in columns. If the runner forgets the book or the supplier is temporarily out of those return books, Use the form completed with the drivers name & signature. Then you can do your returns when you want to, then match the credit invoice to these return forms. Its quickly apparent if they balance or if a part was returned, but no credit issued. You can not leave your buying power laying around in the form of returns. I recommend the PO enforcement Joe mentions, and your PO# to the parts store should be your invoice number, so even months from now you can track and investigate easily.Everything in Joes post is spot on. I recommend every bit of that, and once it is the new normal, its easily to administer. You would be surprised how many unmonitored returns disappear into the abyss.

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  • Have you checked out Joe's Latest Blog?

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      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
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