One of the hardest things to manage, especially in a busy auto shop, is part returns, core returns, warranty parts, and labor claims. This is like having a small coolant leak on an engine that slowly gets worse and worse over time. The next thing you know, you’re broke down and it’s going to cost you a bunch of money. I can personally vouch for everything I am going to tell you because I lived it already.
Running a 6 bay service shop, we were constantly losing track of return items and warranty claims. The year before we started using Protractor, our gross sales were about $850,000.00 with approximately $15,000.00 in lost auto parts. No raise for me! And I still had to clean the bathrooms too. ☹️
The first year of using Protractor, and using the Iron Fist (I was a hardcase at that time) of the part and warranty return control, we grossed just over $1,000,000.00 and had approximately $1,500.00 of lost items, mostly stuff that we broke or accidentally threw away. I didn’t get a raise, but I did hire someone else to clean the bathrooms! 😊
The most important thing anyone has to learn is to always receive a part - even if you know you are returning it right away. This is what we call the Golden Rule in Protractor. You have to receive in order to have a record of it in the system. Most people are not taught how to properly process these items and depend on their suppliers to take care of it to make sure they are getting the proper credit.
This is a foolish mistake. Remember, YOU are the one in control of this, NOT the suppliers! Protractor is designed in such a way that Part Returns and Warranty claims are in two sections.
Streamline Auto Part Returns
Step 1. To control auto part returns, the first section called "Items to be Returned" is a list of all items waiting to go back to the supplier for credit. These are items in YOUR physical possession. This section allows you to manage these items in various ways. Examples would be to move an item to Inventory, Move an item back to a Work Order, Lost and Found adjustment, and Split multiple items. The absolute most important thing to remember is that you are in control of this, not the suppliers.
Whenever you are ready to return items to a supplier, simply highlight the items and select 'Create Return Slip' in the slip number. Either enter the date you are returning, or if the supplier gives you a number, enter that. This is how you know exactly what is going back to the vendor.
Step 2. "Return Item Credit Slips" will be a list of all slips that you have returned parts on in here and you will be able to match up return parts to the actual Credit Invoices the supplier gives you. If they don’t match up, you don’t process until they do.
Auto Warranty Pending Claims Adjustment
Step 1: With Protractor, you can adjust the dollar amount (if needed) for a material item or labor claim. You can reprint an invoice the warranty was performed on. Also, this section allows you to move an item to a different supplier in case it is incorrect. Move items to a warranty claim waiting for a credit invoice. In other words, move it over when it is no longer in YOUR physical possession.
Step 2: Warranty claims is a list of all claim slips created and from here they will be checked and processed when the Credit Invoice comes in. If they don’t match up, you don’t process until they do.
By always treating the items to be returned and the warranty pending claims in a two-step fashion, "IN your possession" / "NOT in your possession," you will stop that leak of money going out the door.
This is Part 2 of our blog series "The Story," where we discuss how Protractor can help auto shops excel in running a profitable and efficient business. Find Part 1 here.
