Post by Pat O'Neill, June 19, 2019, Tips
How are you charging for shop supplies? Flat rate? Let me guess… you are NOT charging for shop supplies? Knowing the answers and how to properly charge is essential to being a profitable business. Mike Anderson’s Collision Advice in conjunction with CRASH Network, has four surveys each year. More than 700 shops across the country responded to the survey last fall on shop billing practices (and insurer payment practices) related to shop supplies. Although more shops are charging and more are frequently being paid for certain shop supplies, the results were a telltale sign that we have a way to go for proper billing and getting paid for all the shop supplies.
The survey showed that although two-thirds of shops say they use an invoicing system of some kind to charge for such items as clips and fasteners, foams and weld-through primer, nearly 30 percent say they simply charge a flat fee for seam-sealer, and 22 percent say they calculate their charge for seam-sealer with no more than an educated guess. The survey found that 96 percent of all shops surveyed charge for seam-sealer, and 84 percent say they are reimbursed for it most of the time or always by the eight largest U.S. insurers. But according to Anderson, the amount being charged is not always correct.
“Many shops commonly charge that flat fee without researching how much seam-sealer they actually will be using on that particular job,” said Mike Anderson of Collision Advice, who conducts the quarterly “Who Pays for What?” surveys in conjunction with CRASH Network. “I recall a shop in Minnesota that was putting a rear body panel and a rear frame rail on a vehicle, and when they added it up, they had used more than $300 of corrosion protection items, such as seam-sealer, cavity wax and weld-through primer.”
Calculations such as this can be difficult, but Anderson recommends several tools developed by 3M, such as 3M CRiMP (Collision Repair Materials Planner), that can help shops estimate the amount of seam-sealer that will be needed. Anderson’s Collision Advice website contains helpful advice and tools to assist as well. Even with these types of tools, knowing what to put on the estimate can also require knowledge about the vehicle make, so subscribing to the OEM’s websites to get the most up to date information may be needed.
Shops can take the current “Who Pays for What?” survey (or sign up to be notified about future surveys). Four surveys are released each year, each focusing on different aspects of the collision repair process, one per quarter, each takes about 15–25 minutes to complete. They can be completed by any shop owner, manager or estimator who is familiar with the shop’s billing practices and the payment practices of the largest national insurers. Individual responses are not released in any way; only cumulative data is released. The next one is opening up in July on Frame and Mechanical, to participate click here.
Chesapeake Automotive Equipment provides top-of-the-line general shop and automotive equipment to commercial automotive-related businesses ranging from independent mom and pop auto collision and repair shops to heavy-duty repair facilities to auto dealership groups along the East Coast. We serve customers in Maryland, Virginia, Metro D.C., West Virginia and Delaware. Contact our sales team at 800.604.9653 to find the right solution for your business.