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Monday, 29 October 2018 16:14

CCRE’s Fall Seminar & Convention Teaches Body Shop Owners Another Way of Conducting Business

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Steve Behrndt presented on job costing during CCRE’s Fall Seminar in Atlanta. Steve Behrndt presented on job costing during CCRE’s Fall Seminar in Atlanta.

Index

 

Discussing insurer interference in the collision repair industry, Lombardozzi touched on hold harmless agreements that insulate insurers from liability, specified vendor purchasing, insurer supplements, the required use of crash guides for estimating and much more, predicting that the industry is in for an even tougher future if shops do not establish contracts with the vehicle owners directly, educate consumers, and remove the insurer’s third party influence from their businesses. One way to do this is by creating necessary procedures, for which attendees discussed some options.

 

Lombardozzi shared some rules and tips for everyone to follow to take control of their businesses.

 

He also advised, “Stop sharing information on social media, and quit bragging and boasting online; Big Brother watches everything! We are trying to solve a difficult puzzle, but the goal is attainable; if you learn the process, the pieces will all fit together. It’s time to begin making money, not just repairing vehicles!”

 

Next, Jeff Bryant of Autosport Body Works delivered a presentation on billing paint and materials using a cost accounting program.

 

Lombardozzi recalled, “One of the highlights of his discussion was how he discovered that almost 50 percent of the materials he was using were never being billed or accounted for. After using a P and M invoicing program, the shop’s profits on those materials being used increased substantially.”

 

Bryant explained that paint and materials are the cost of doing business, but that any costs incurred to produce repairs should be a profit center for the business.

 

He explained, “The rate per hour system has no real basis in reality and is not profitable, so why do we still use and accept it? Because the insurance companies like it because it benefits them. You will never win as long as you play their game by their rules on their field!”

 

Exploring the cost of the rate per hour method, Bryant walked attendees through some financial scenarios.

 

He shared, “The first year Autosport implemented paint and material cost accounting and proper collecting, the results were an additional $67,000 collected. A 6--8 percent increase is huge considering most shops operate on a less than 5 percent net profit margin.”