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I do a lot of aftermarket work for the local dealerships and body shops. Most are 15 day net terms but others are getting stretched out pretty far. 10th of the following month, lost invoices, amount billed is less than estimate, no one is here to sign the checks. That PO was closed and you need a new number. The crazy excuses just keep on coming.

 

So my question is how do I break this cycle and encourage prompt payment? I do not want to discount a lower than normal Profit margin. And setting late fees may turn business away. Unfortunately it is a big part of my business.

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I deal with it some myself, Biggest thing is no Net terms anymore, you pay with a credit card or check when you pick the vehicle up, I don't care if it's a huge dealership or not. If you can't hire techs competetant enough to do everything in house and need me to do stuff, these are the terms.

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Agree, I have 1 customer who I let charge a balance and it's been an ongoing nightmare. Luckily his car broke down last week and he towed it to me. I explained to him that we could not do any work until his balanced was paid in full. It's probably gonna be 2 months before he has me paid off, but it's the last time I'll let someone charge a balance with me, including dealerships.

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I deal with it some myself, Biggest thing is no Net terms anymore, you pay with a credit card or check when you pick the vehicle up, I don't care if it's a huge dealership or not. If you can't hire techs competetant enough to do everything in house and need me to do stuff, these are the terms.

Ditto. Bring a check or credit card at time of pick up.

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  • 1 year later...

I stopped accepting personal checks about 1 1/2 years ago. Unless it's someone I feel comfortable taking a check from. After one really big delema, I learned that writing "bad checks" is almost a legal way of stealing. Most of the time it's not worth going to court over. Sad world we're living in.

Sent from my Chromebook 11 Model 3180 using Tapatalk

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  • Have you checked out Joe's Latest Blog?

         3 comments
      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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