Warranty + Non-Warranty Work On Same Invoice?

[timbre4]

Expert input with question below please:

Tim, I have a new account using Managerplus. About 50% of their business is warranty work. The owners of the shop also own a warranty co.

Customer comes in and has warranty work performed. While they are there the shop does a thorough inspection and finds other non-warranty work to sell them. When the customer comes in, the difficulty is trying to determine what the customer owes vs. what the warranty co is on the hook for. So then they have to get out the trusty calculator. Then there is the issue of collecting the deductible. Using a SO may be the best option, but then you have two invoices to deal with.. If you do the SO, it would at least be nice to collect the deductible on the ?other work? invoice, so then you run into the Haz Mat fee if you add deductible as a labor item..

Do you have any tips you could share with me that might help us develop the best work around for this particular customer?
Thanks.

[steven kiser]

i do quite a bit of work on cars where people have after market warranties. first of all i explain to the customer that they are financially responsible for any difference in the repar cost. i make sure they fully understand that. when i call and recieve a dollar amount from the warranty co. i notify the customer of the amount and i make the authorization amount available to them so if there is any further negotiations it's up to them. once the work is completed i open the note window type in the total order figure, the amount that the company will pay, and the balance due. i also type in the warrenty co information and authorization # and the person i spoke to. i note the course of communication and time. on the work order i type a w next to part description to signify warranty. i also do that if i purchase a part from a seldome used supplier. on an install i did for jasper i will accept the warranty amount. if a jasper warranty comes into my shop that i didn't install i will charge the customer the full labor amount and then jasper will reimburse the customer at their labor rate. i have seperate disclaimers pre printed for all aftermarket warranty work stating that the customer has been made aware of all the financial obligations and have it sighned and dated. if during the course of the repair we find something else with the car that needs repair i will contact the warranty co and customer and repeat the policy i have and keep a record of it. sometimes warranty companies will look for a seperate deductable for other repairs. this is between the customer and them. i will caution about payment though. i have run into situations where the warranty company has been in recievership and i found this out after the work was completed. now i make sure of the dollar amount and how i'll be paid. i only accept cc payments and the vehicle isn't released untill all transactions are completed. make sre everyhting is documented six way's from sunday, sighned and copies put in a seperate file. any copies made i have customer sighn again under their copied signature. on my disclaimer i add that the customer will be responsible for any cost incured by me if litegation is started. people feel that since they paid thousands of dollars for these policies that they are covered for anything. i also make clear that they are responsible for my labor and time if an appraiser wants to tear something down to take a closer look. i have found the warranty companies want you to include the extra cost as part of the original job. it's obvious hat i do alot of warranty work and my advise is to cover yourself to the point where you think it's ridiculous. i know this is alot more than you asked, edit out all the banter but i just want everyone to be covered. i had a company in a recievership and being oversaw by another warranty co, get authorization, complete the work and when i submitted my claim i was then told that my claim would be processed in the order recieved when the courts released the funds. i was at the end of a long line.

[ricmorin]

Expert input with question below please:

Tim, I have a new account using Managerplus. About 50% of their business is warranty work. The owners of the shop also own a warranty co.

Customer comes in and has warranty work performed. While they are there the shop does a thorough inspection and finds other non-warranty work to sell them. When the customer comes in, the difficulty is trying to determine what the customer owes vs. what the warranty co is on the hook for. So then they have to get out the trusty calculator. Then there is the issue of collecting the deductible. Using a SO may be the best option, but then you have two invoices to deal with.. If you do the SO, it would at least be nice to collect the deductible on the ?other work? invoice, so then you run into the Haz Mat fee if you add deductible as a labor item..

Do you have any tips you could share with me that might help us develop the best work around for this particular customer?
Thanks.

I agree that two invoices is the best way to go. The current invoice format is difficult to follow with the scenario. Maybe the 'by-the-job' approach invoice will make this easier in the future.

In this situation, I am assuming I get paid by the warranty company for the warranty work less the deductible. I would start an RO as usual. Any upsold non-warranty work would be added to the original RO as usual to track approvals. The non-warranty work would then be 'SO'd' to a separate order. Customer would be responsible for full amount on non-warranty invoice. On warranty invoice, note would indicate customer deductible responsibility. That would leave a balance on warranty invoice for warranty company to pay.

This is what first comes to mind. After using this method for a while, it may change.

[a&mauto]

Expert input with question below please:

Tim, I have a new account using Managerplus. About 50% of their business is warranty work. The owners of the shop also own a warranty co.

Customer comes in and has warranty work performed. While they are there the shop does a thorough inspection and finds other non-warranty work to sell them. When the customer comes in, the difficulty is trying to determine what the customer owes vs. what the warranty co is on the hook for. So then they have to get out the trusty calculator. Then there is the issue of collecting the deductible. Using a SO may be the best option, but then you have two invoices to deal with.. If you do the SO, it would at least be nice to collect the deductible on the ?other work? invoice, so then you run into the Haz Mat fee if you add deductible as a labor item..

Do you have any tips you could share with me that might help us develop the best work around for this particular customer?
Thanks.

I agree that two invoices is the best way to go. The current invoice format is difficult to follow with the scenario. Maybe the 'by-the-job' approach invoice will make this easier in the future.

In this situation, I am assuming I get paid by the warranty company for the warranty work less the deductible. I would start an RO as usual. Any upsold non-warranty work would be added to the original RO as usual to track approvals. The non-warranty work would then be 'SO'd' to a separate order. Customer would be responsible for full amount on non-warranty invoice. On warranty invoice, note would indicate customer deductible responsibility. That would leave a balance on warranty invoice for warranty company to pay.

This is what first comes to mind. After using this method for a while, it may change.

This is exactly how we do warranty work.

[Matt R.]

This is great informantion. The more that i deal with extended warranty companies, the more that I learn (I'm still a noobie as a service writer). A couple of questions for the seasoned vets.

#1 When using O.E. parts, the warranty companies only want to pay list, we know that list is a bs price and no shop should ever use it. Do you charge the customer the difference? I once told the warranty company that because they didn't want to pay me the proper price for the part, I would get the difference from the customer. They objected but they don't run our business so who cares what they say.

#2 Extended warranty companies only want to pay sublet cost on sublet repair. I can imagine that most shops mark up sublet. They also want a copy of the reciept of the sublet job. I know a workaround with this problem but can see some ethical issues with it. Any advice?

*Disclaimer* I imagine that this is best in shop to shop section, but somehow this seemed an appropriate place to ask this due to the nature of the conversation.

[f8jon360]

In both cases, Matt, yes it would be up to the customer to mae up the difference.

Usually when dealing with a warranty company they WILL nickle and dime you to death. They WON'T pay shop supplies or haz mat, in most cases since they are out of your state, they will refuse to pay the sales tax, even though your state requires it because the vehicle that uses the parts/labor is in your state, not the warranty company's.

I always make the customer pay the tax on top of their deductible, musch like the grocery store makes you pay tax on the whole price of an item you use a coupon for to reduce the price. As far as dealer list goes, I usually don't have too much of a problem giving them that, although some dealers actually charge more than they are supposed to, so like on a Saturn, the warranty company will pay list price, and the parts department sets their wholesale price at or above the mfg sug list. What you do is your discretion.

As far as providing them the original copy of the sublet, i would tell them to piss up a rope, it's none of their business what you are paying, they need to pay you what you asked. Your funds are tied up to that specific vendor until they pay, you did the legwork to contract the outfit, you spent time sending the head out and retrieving it, etc. etc. If all else fails in this case, charge the customer.

I recently had a deal with a Volkwagen cooling fan that fell under x-warranty. I created the estimate, called the warranty company. They set their own price, I called the customer and told them the difference, which ended up being considerably higher than their deductible. After the customer mulled it over for some time, they called me and said, "Well, $200 is better than $450, so go ahead." Most times they will understand.

[rjerin]

Does anyone have a good solution for handling invoices for services where there is an extended warranty company involved and the customer has a $100 deductable? The issue is the Warranty Companies are tax exempt but the vehicle owner is NOT and must pay tax on the deductable. This shop is a former Chrysler Dealer that still has other dealerships and the accountants are throwing a fit over this issue as ADP is set up to handle this type of invoicing. The issues is with the taxes being ONLY on the deductible portion and having them show up on reports as taxes.
Thanks

Bj

[steven kiser]

The issue is the Warranty Companies are tax exempt

how? it's not a resale issue here. on any of the warranty companies i've dealt with they've paid the taxable amount. you're not billing the warranty company you're billing the customer and the warranty company is actually a co-pay. when i have a repair that's a warranty issue the customer will pay the difference only.

[fortknoxx]

you can make 1 or all labor lines tax exempt.
while in the labor tab, click on tax in the bottom left corner. change the tax status. then ok.
bill the deductable as a part or sublet.

this will leave the customer and vehicle taxable, not the labor. if there are parts the warr co is paying for, you can do it line by line.

[brianp87]

I bill them tax. The customer is the one that has to be tax exempt according to my acct.