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The true cost of collision repair supplements

Wednesday, January 2, 2019 - 08:00
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Some shops never have more than one supplement on repairs while others have three, four, five or more. Supplements are costly to production, add workload to accounting, absorb damage appraisers’ time and reduce confidence of bill payers — the biggest concern is that supplements are preventable.

Consider these factors:

1. A discussion arose about supplements during my SCRS Repairer Driven Education presentation at SEMA on Damage Assessment Documentation when an attendee that is a claims processor shared that when more than three supplements were submitted on a repair their trust in the shop was reduced.

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This article is worth .25 credit hours toward Automotive Management Institute (AMi) designation programs.

To receive credit, log in or set up a free “myAMi” account at ami.knowledgeanywhere.com. Once inside “myAMi,” search for “The True Costs of Supplements,” or go to ABRN.com/truecost and successfully complete the quiz.

2. Supplements are costly to production because, commonly, when a supplement is submitted, work on the vehicle stops, it is pushed outside, and the technician is given another repair to keep him busy. This creates work-in process that is not moving forward. Technicians want to get paid for what they have accomplished and the bill for the pre-ordered parts is coming due. These actions also detract from positive touch-time and cycle-time metrics, which undermines relationships that shops rely on for workflow.

3. Each invoice to be processed adds time to the accounting department tasks: each invoice needs to be matched to the repair, validated against accounts payable and a check must be processed for payment. 

4. Every damage appraiser I talk to tells me they have too much to do; I believe it when I see their supplement workload. On average, a supplement takes 30 – 45 minutes to create and finalize. If a repair has three supplements it can absorb 1.5 to 2.5 hours of a damage appraiser’s time, pulling them away from important things like customer service.

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