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Posted

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?



Posted

Ideally you do want someone in charge of inventory, returns, cores, and insuring that every part is charged out correctly. It sounds like you need a quick and easy way to manage your parts and returns. Here is what I suggest:

  • First, have a meeting with your suppliers and tell them your issue. Also, tell all your suppliers that every invoice must have a PO#, or you will not pay it. This puts the burden on both you and the in your shop
  • Create a system where the parts are checked in and make sure that the part is entered correctly on the customers work order, BEFORE it is installed on the car
  • Create shelving that clearly designates, Parts in, Cores, Defects, and holding (for ordered parts, but the car is not in your shop yet)
  • All daily invoices must be marked with the customer work order/ invoice# for tracking purposes, and also the person who ordered the part
  • Tag or mark each part. You can put customer's name, invoice, license plate, etc. Some part companies will give you stickers; Core, Defect, etc
  • Do returns daily or every other day, don't delay. Put the returns in a tote or box and instruct the parts driver to take it.
  • File all return slips in a separate file
  • File all invoice slips in a separate file
  • Review this file daily to insure its accuracy
  • Make sure you have a copy of the return slip that goes to the parts store
  • Make sure you get a separate credit invoice with a detailed list of every item, don't wait for the actual statement. You don't want a total credit from the supplier, you want a detailed list of what you returned.
  • Match all the returns against your file
  • You need to match every invoice and credit against the statement

I hope this helps, it's a basic process without using computer software or spreadsheets.

  • Like 1
  • 3 weeks later...
Posted

Thanks Joe! I have implemented this over the last week and so far so good. Thanks for the advice.

  • 1 month later...
Posted (edited)

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
Posted

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.

Posted

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?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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