Q&A with Jan Kelly: Sales to Service $olutions
Q. How can we streamline our service department process to close out repair orders and charge the deals so that they occur in the same pay period in which the unit was sold?
A. In many smaller dealerships the service department simply does not have the personnel to close out repair orders in a timely fashion. If you can’t afford to computerize these operations, the next best choice is have the service department produce a list of typical service work that the sales and/or F&I department promotes in the deal. The list should include parts and labor. Create a process that designates Due Bills, We Owe, or an Add and Removal form. The idea is to utilize documentation signed by either a sales manager or F&I manager authorizing the work to be done. The charge for the authorized work can then be set aside in the recap. This process ensures the sales consultant’s commission will be accurate since the cost of the additional work has already been accounted for. The accounting office treats the work as a payable to the sales department and a receivable to the service department. The recap sheet itemizes the money flow within the deal.
The service department can treat work that a sales manager has not authorized as customer pay work; that is, the service department will collect money from the customer when they perform this type of service.
Let’s review what happens in the mind of a sales consultant when the service department takes months to close out a repair bill. Inevitably, the service department will perform work that the customer should pay. The customer has not yet paid for the service. So the service department will go where they know the money is – the sales department. When the sales consultant receives a “deduct voucher”, selling attitude and momentum comes to a screeching halt. When this unfortunate situation occurs in the winter months, the result is often a change in sales personnel, which in turn damages the dealership team atmosphere.
You can implement repairs by a simple change in procedure. Create the sales to service price list so that sales managers identify and authorize service work and F&I revises the recap sheet of every deal when the sales manager authorizes additional work. The result is that funds will be available, waiting for the closed repair order.
RV Executive Today, April 2004, p. 30