More than 1 in 4 shops is now using a materials invoicing system – a 50 percent increase from just four years ago – and those that do say they are regularly being paid based on those systems, according to data from a “Who Pays for What” survey earlier this year.
Of more than 760 shops responding the survey, 28% say they are using a materials invoicing system rather than the traditional multiplier method (dollars per refinish hour) to bill for their cost of paint and materials. That’s up from just 19% in the same survey back in 2016.
Although it appears insurers have not universally recognized the validity of invoicing systems, the majority of shops using such a system say they are paid by the eight largest insurers "always" or "most of the time" when they bill based on the charges calculated by their invoicing system. Shops report that with the exception of Geico, the top eight insurers all agree to the invoiced amount 60 percent to 70 percent of the time. The survey data indicates that has been the case for at least the past four years.
Shop consultant and trainer Mike Anderson of Collision Advice, who conducts the “Who Pays for What?” surveys in conjunction with CRASH Network, said now may be a good time to make a switch to using a materials invoicing system before more complicated refinish procedures, with special materials, become increasingly common.
“I think this is going to become important as we start to see more 3-stage and 4-stage finishes, as well as more limited-use toners that shops may not stock because they are only infrequently used or have limited shelf-life," Anderson said. “I believe the shift toward invoicing will continue, and that using the paint scale to create invoices will continue as more paint companies integrate their scales and systems with the shop management systems."
He said the latest “Who Pays for What?” survey, which focuses on “not-included” frame and mechanical labor operations, is open now through the end of July at:
https://www.surveymonkey.com/r/NNZ275K
Survey participants receive a report with complete survey findings at no charge, broken down by region, insurer and DRP vs. non-DRP. The report also includes analysis and resources to help shops better understand and use the information presented.
Anderson said the survey, which will take about 15-25 minutes, can be completed by anyone in a shop familiar with the shop's billing practices and the payment practices of at least some of the largest national insurers. Each shop's individual responses are held in the strictest confidence; only aggregated data is released.
The results of previous surveys are also available online (https://www.crashnetwork.com/collisionadvice).
Collision Advice (www.CollisionAdvice.com) is an independent training and consulting firm featuring some of the most respected and experienced experts in the collision repair industry. CRASH Network (www.CrashNetwork.com) is a subscription newsletter offering news and information not available from other industry sources.
