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Thread: How would you bill this job?

  1. Join Date
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    How would you bill this job?

    R+R rt. widget........8.0 book time.

    Would you bill for 8 hours?

    OR...

    Would you bill for the time it took?

    What about the 2 minutes it took for the tech to read the work order and get out his tool?
    What about the 15 minutes brake for coffee?
    What about the 5 minutes bathroom brake?
    What about the 5 minutes clean up time for lunch?
    What about the 5 minutes clean up at the end of the day?

    What about the 32 minutes of non productive time? Is that in the inc. portion of the book times?

    Was the job done at the end of the day?

    At this time, why are you wondering why you are not making your desired profit?

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    I know a shop owner that was more prepared for the insurance company's lawyer during a deposition than they could ever have guessed. The lawyer had subpoenaed the time cards and flag sheets for a couple of the shop's most productive techs and tried to lay the trap to make a case for fraud when comparing the hours worked as compared to the hours flagged. The shop owner referred the lawyer to the data provider's explanation regarding their posted time allowance as being representative of the time necessary for an "average" technician to perform certain operations. He then said, "You don't have the same sheets for apprentice techs that generally take much longer, working more hours than the time they produce, nor do you take into consideration the use of helpers or acknowledge contributions to the process by others that go undocumented. If what you are suggesting is that a tech with more than 10 year's experience and 20 thousand dollars worth of tools is conspiring with me to commit fraud for making the necessary investments in tools and training that allow him to be better than average, that your client believes that they owe only for the actual time on the job, I'm in but understand this; EVERYBODY that touches a job that this insurance company is paying for will punch in and out each and every time they make or answer a phone call about this job, order a part, move the vehicle, wash the vehicle or touch the vehicle in any way, the time will be recorded and we will be paid according to the time accumulated. Just say the word and I will make that call right now, making the new terms effective immediately." Strangely, they would not take him up one the offer and the subject was dropped.

  3. Join Date
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    What about the 2 minutes it took for the tech to read the work order and get out his tool?
    What about the 15 minutes brake for coffee?
    What about the 5 minutes bathroom brake?
    What about the 5 minutes clean up time for lunch?
    What about the 5 minutes clean up at the end of the day?

    What about the 32 minutes of non productive time? Is that in the inc. portion of the book times?

    Generally accepted practice and technically, would call all the above non productive or indirect (overhead) time except the 2 minutes listed first. Preparation for the job that can be tied directly to that job is part of direct labor for that job, and that would include the necessary time for any cleanup. As long as any labor time is tied directly to the job at hand, then that is part of the cost of production. Moving tools, parts, car securing work instructions, materials would be considered direct labor so long as it is easily identifiable and tied to a specific job. Like parts that will not perform the designed function (AM Parts) that require more labor. Bathroom breaks, lunch breaks, waste are non productive in normal standard cost assessments.

    Non-productive time for employees that work a standard day would be included in overhead and would be apportioned out to all jobs for an accounting period.

    However, a business owner can assign anything as direct or indirect as he/she sees fit, and charge accordingly. But in order to measure productivity (job performance) and down time (non productive overhead costs), direct labor and overhead/overhead items should be separated. Normally differentiation of expense is more needed for larger companies that are labor intensive where productive efficiency is extremely important employee to employee.

    My opinion, repairers are not compensated for time or operations due to what insurers will pay, controlled by data or labor survey. Nor are repairers specifically compensated for reasonable profit margin on parts and materials, or for sufficient materials in many cases. But the really big area that is not paid is overhead. Of course if you don't define overhead properly how can you charge for it effectively? Most revenue comes from labor and parts, so repairers look at the bottom line rather than performance measures as to how their revenue is spent. Nothing is measured in a normal business fashion as far as I can tell.

    The reason to analyze all your expenses and revenue line by line is to compare and evaluate over standard periods: quarter, annually year to year, so you know specifically where you are not compensated, and who is working profitably. Or not.
    Last edited by Roy Smalley; 02-20-2018 at 09:20 PM.
    Roy Smalley,
    Texas

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    I sincerely hope that, given what Todd Tracy has set in motion by illustrating that shops have the option to operate based on their own decisions or the decisions imposed upon them by entities that assume absolutely no liability for those decisions, shops finally recognize the business principles you have espoused, Roy, the same business principles the CCRE has tried for years to get through the thick skulls of shop owners. However, my bet is that Tracy, along with other lawyers that "get it", will have to put more shops out of business before the reality occurs to shop owners that they have become targets of legal actions against them for continuing to fear insurance companies more than they do the courts when consumers become aware they have duped in the conspiracy against them.

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    Roy, to be technical correct, The "What about the 5 minutes clean up time for lunch?
    What about the 5 minutes clean up at the end of the day?" are part of the job as their hands would have stayed clean if not for the processes involved in the job.

    But lets not split hairs, What about the Avg, tech that has to come in he next day and work for the 32 min. in order to finish the job? why is he cheated because the shop decided to accept the "book" time?

    I know the answer, but do other shops realize it?

    I wonder how many shops know their overhead, and have subtracted it from the labor rate that many insurance companies pay?
    This is the actual rate that you are working for!

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    Anyone that uses "book time" is an idiot. About as clear as I can make it.



    "What about the Avg, tech that has to come in he next day and work for the 32 min. in order to finish the job? why is he cheated because the shop decided to accept the "book" time"?

    Re read my post.
    Last edited by Roy Smalley; 02-22-2018 at 08:08 PM.
    Roy Smalley,
    Texas

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    I am enjoying retirement more and more every day.

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    Hard belly laugh.............
    Roy Smalley,
    Texas

  9. Join Date
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    I have noticed that instead of coming home after work everyday, furious and completely wrung out, along watching no local news, I now have to actively look for things to be pissed off about.

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    I have the solution. CNN
    Roy Smalley,
    Texas

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