Article - Fender Mender Magazine
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Collision repairers these days face more pressure to be lean than a bikini-clad supermodel at a beachfront photo shoot. And while having a streamlined operation benefits shops as well as the insurance companies seeking lower repair reimbursement costs, the equation of more lean plus more productive equals less time to spare and lower profit margins, too.

The margins are made even tighter by labor rates that have been largely unchanged for almost two decades and a stagnant reimbursement process for paint and materials used. Fortunately, experience and education about the intricacies of working with insurance companies has given some shop owners more control over their reimbursement. This is particularly true of a line item contained at the end of every estimate where accounting for paint and materials (P&M) costs takes place.

Even though most insurance companies are required to pay a shop’s every cost to refinish a repaired vehicle, historically, a majority of shop owners don’t keep close enough track of these items because of the additional time and effort required. What some might not realize is that although many of the materials seem insignificant, they can add up quickly and make a real difference in the profitability of a repair.

A software solution

There’s a growing movement within the autobody industry to increase revenue and to get a tighter grip on paint and materials costs, squashing the outdated and almost entirely inaccurate formula that multiplies refinish labor hours by a set P&M dollar figure per hour (around $28, on average). Recently the Massachusetts Auto Body Association won a statewide regulation that requires insurance companies to reimburse shops based on estimating system invoices for P&M instead of using the old formula; and the Collision Repair Association of California has begun legwork on similar legislation.

In fact, word is spreading that a dollar figure-times-paint-hours approach isn’t nearly enough to cover most shop costs when it comes to paint and materials reimbursement. “It’s changing fast,” says Kerry Friar, of ComputerLogic, which is helping pave the way for real cost reimbursement.

“The future of repairs is definitely going to itemized invoicing rather than the old method of a dollar amount times the amount of hours,” says Friar, who is product manager for the company’s P&M costing innovation, PMCLogic.

The company unveiled the latest version of PMCLogic at the 2007 NACE event; it’s a software program to help shop owners take the guesswork out of P&M accounting, allowing them to easily document, itemize and invoice for all materials and to come up with a true cost for refinishing. “What it does is it actually gives them a detailed, itemized invoice of the paint and materials used in a particular repair for a vehicle,” says Friar.

PMCLogic accounts for all things P&M that are used in a repair job, from sandpaper to car wash soap to razor blades. “Everything that you use on the job is on that list.”

PMCLogic was among the first truly researched paint and material costing systems offered to the industry, and claims to be the only P&M costing product that is linked to all of the major estimating systems (ADP, CCC, CompEst and Mitchell). The links are provided via Collision Industry Electronic Commerce Association (CEICA) standards.

The direct interface between PMCLogic and established estimating systems makes generating an accurate P&M estimate quick and easy to do. Estimates for a specific vehicle type include the amount of paint and materials that are expected to be used based on all of the panels, plus other items repaired or replaced. It also factors into the equation other special conditions or requirements for each particular job.
The result is a realistic and accurate price generated from a vast database of industry information and current prices for the products used.

“The feedback from our customers has been overwhelmingly positive,” says Richard Palmer, ComputerLogic’s president and founder. “The software’s ease of use is the key reason they initially try the product, and the accuracy of the information is what keeps them using it.”
accuracy pays

ComputerLogic has been around for nearly three decades, offering software development in the automotive services industry and focusing primarily on the collision repair market. The company has applications for body shop, supply chain and insurance claims management, as well as PMCLogic for costing of paint and materials. The company sells and supports its products in 24 countries and develops software for insurers, manufacturers, distributors and repairers within the autobody industry.
Regular use of the program can save more than just dollars and cents on every repair, Friar says. “I believe that if everyone in the industry would use PMCLogic as the standard for (P&M) reimbursement, it would reduce cycle time an average of at least one day per repair, due to the elimination of haggling over this matter and the cost and time associated with writing supplements once the work is done.”

Just as a trained and reputable repairer wouldn’t simply guess at the best way to repair a bent frame or fix the damage on an injured panel, he or she should not make guesswork out of paint and material costing. Not only do programs like PMCLogic help fully document the materials you use in your repairs, they help you to properly get paid for them, too.

 

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