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Sharing profits and loss

Get your managers and blueprinters the financial data they need to improve performance
Friday, March 14, 2014 - 06:00
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As an MSO, I’m a firm believer that you absolutely need your location managers to understand your financials. They are the people who can make or break that individual shop’s performance, so they need to know every month what their goals are and how they are doing. It’s all about accountability. It can also drive some friendly internal competition among managers, which can ultimately drive improvement.

Although my focus here is on how we get this information out to our location managers, I believe it is equally important for a single-location collision repairers to share similar information with the key people at the shop.

Here’s how the process works within our company. Within two or three days of the end of the month, all of our profit and loss statements (P&Ls) are created. Then, one by one we have a web conference (via “GoToMeeting”) with each of our location managers. The conferences typically include the comptroller, location manager and head estimator or blueprinter. We may extend the invitation on a case by case basis if a particular department within that location is struggling.

During each meeting, we analyze each category on that location’s P&L, including sales, cost of sales, gross profit percentages, overhead, etc. We generally look at four columns: month to date, year to date, budget to date and last year to date. Our shop management system allows us to quickly drill down for more information as needed. If the P&L indicates $2,000 was spent on “building repairs and maintenance” at that location, for example, we can pull up those invoices to see what vendors were paid for maintenance or repair work.

These meetings take us about 2.5 days each month, but by the end, the managers own those P&Ls. They have a good understanding of where they are and where they need to be. We include the head estimator or blueprinter because if our goal is to have body labor account for 30 percent of sales, and it’s only 25 percent at a particular location, they need to know. Some of it may be based on the mix of work; heavy hits tend to have more parts replacement. But it can also be based on how blueprinters and estimators are writing their sheets.

Often, I can sit back and essentially let the employees run the meeting. If a location’s P&L doesn’t look that great, I’ll say, “Tell me what happened here.” If they can explain what’s happened, that is accountability. If they can’t explain what happened, then they need more training.

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