With vehicle designs and components changing year after year, estimators have an increasingly tough job. It’s easier said than done to write estimates 100 percent accurately on the first try, even for the most well-trained and thorough estimator.
Troy Neuerburg, manager of marketing business services for Sherwin-Williams Automotive Finishes, says it’s commonplace for estimators to miss at least one element on estimates. It’s usually some type of small process, part or material that gets omitted, he says—such as clips, absorbers, fasteners, headlight aiming, code resets or battery disconnect items. He sees shops make those mistakes on roughly 10 percent of estimates written.
Those typical inaccuracies might be expected to happen every now and then. But over time they can have a dramatic impact on your shop’s efficiency and profitability.
Neuerburg says the solution is to use an estimate scrubbing service. He says it’s an underutilized tool even though most shops already have easy access to the technology through their information provider. If used habitually, it could have several positive impacts on your business:
“It’s about writing good estimates and getting paid for what you do,” he says. “You will decrease rework, get paid for material usage, recoup proper labor charges and process more cars through the shop.”
Finding a Fix
Brook Bradley, director of sales and administration for Craig’s Collision Centers, based in Texas, says the shop’s estimators routinely miss certain estimate line items. In fact, he says it happens about 90 percent of the time. Most notably, they miss material items such as seam sealer and flex additive, and labor items including refinish welds, part removal and installation, and hazardous waste charges. Those are all processes that technicians have to complete regardless of whether they appear on an estimate, and it’s just a matter of whether the shop receives payment for work it completes anyway.
“Those are things that shops should be charging for or getting reimbursed for,” Neuerburg says, noting many shops lose out on 5 to 10 percent of possible revenue due to missing estimate components. “Even if you only miss $50 worth of estimate items per day, that’s $1,000 a month and $12,000 a year. That’s money missing straight out of your bottom line.”
Years back, Bradley says the shop was missing roughly $25 on each $2,000 to $3,000 estimate. With about 1,000 monthly repairs across six shop locations, those estimating mistakes amounted to $25,000 of lost revenue if they went unnoticed.
Although issues were often caught, estimating inaccuracies generated a 45 percent supplement ratio at Craig’s Collision Centers, Bradley says. Office staff had to answer phone calls and questions from insurers each time, causing additional administrative work, shop audits and insurer re-inspections of repairs.
—Willis Colpitts, senior product operation manager of product
management, Mitchell International
Bradley found a fix four years ago. He signed up for a piece of estimate scrubbing software, an add-on component to his CCC ONE estimating platform through CCC Information Services Inc. The system scans estimates within minutes and notifies the estimator of any inaccuracies, including items not written that should be and items written that shouldn’t be.
The benefit, Bradley says, is that you catch most of the items that generate supplements up front. And you include all the labor and material dollars that you should be reimbursed for. He says it reduces mistakes and maintains a healthy bottom line for the company.
Compliance, Education and Service
Neuerburg says while estimate scrubbing software has been on the market for years, not enough shops use the services. But they should. Besides greater efficiency and profitability, he points to several other benefits of using the software:
• Insurance compliance. Bradley says the estimate scrubbing software can be configured to specific processes and guidelines required by each insurance direct repair program (DRP) he’s involved with. All insurance carriers have different rules, and the software helps to efficiently comply with each one, replacing an estimator’s memory with automation. He says it’s also a safety net if an estimator who specializes with one insurance program is absent.
The estimate scrubber also verifies accuracy of administrative aspects, which Bradley says the shop had issues with in the past. The software checks for repair documentation, photos, estimate notes, vehicle information, total loss thresholds, rates, discounts, markups and parts sourcing.
“We use this for insurance work religiously,” Bradley says, noting it is necessary to periodically update your configurations as insurer guidelines change—something that needs to be done manually. “It allows us to maintain compliance.”
Willis Colpitts, senior product operation manager of product management for Mitchell International, says it doesn’t take much for shops to be removed from DRP relationships. Insurers measure every small problem and inconsistency on shop estimates because that generates supplements and causes administrative work to reprocess information. Shops get ousted from insurer programs if that happens regularly, he says.
“Shops have to get things right up front to maintain that relationship,” Colpitts says. “That’s vital in maintaining good relations.”
In addition to reducing supplements, using an estimate scrubber can also result in improvements in key performance indicators (KPIs) and insurance scores.
• Estimator education: Neuerburg says estimate-scrubbing software can be a powerful tool in training estimators. He says most estimators take training about once every five years, but using the software can boost their knowledge without formal training.
For example, estimate scrubbers help inform estimators about alternative repair solutions, says Neal Lowell, senior director of product management for Audatex, a Solera Company. When it comes to repair-versus-replace decisions on bumper covers, estimators will typically write based on familiar processes. The software informs estimators of different solutions based on specific, unique circumstances, he says.
“It helps with their decision-making process,” Lowell says.
Bradley says estimators take note every time something is flagged on an estimate scrub. They retain the information over time, and improve their estimating skills.
“Once they correct those mistakes before the scrub, they get even faster by avoiding estimate changes afterward,” Bradley says. “They get much more efficient by improving knowledge through use of the tool.”
• Customer service: Lowell says shops are able to better inform customers regarding the specifics and timing of the repair process by resolving inefficiencies up front.
“It’s about creating the most amount of accuracy and getting the fairest estimate up front without having additional supplements and work,” Lowell says. “By improving estimates, you increase the speed of the process, decrease costs and ultimately improve customer satisfaction. That’s what drives repeat business.”