More than ever before, accurate record keeping is essential to the success of a collision repair shop. Not only do shops need detailed records for maximum insurance reimbursement, the new generation of ADAS-capable cars carries a level of liability in repair that their predecessors never did. And good records lead to good customer service, says Cecil Bullard, owner and CEO of The Institute for Automotive Business Excellence.
“Bad record keeping will cost you,” says Bullard, “in just about every way possible.”
The Backstory
“It's about the customer, really," Bullard says, "and the customer needs to have a good understanding of what happened with their vehicle.”
But having a process for spelling out what happened, why you did what you did, and what the ultimate solution was isn’t only important for the customer, he adds—it’s important for the success of your business, too.
“You want to make sure that if you have to look back at this later,” says Bullard. “Let's say 14 months goes by and there's some kind of an issue with the vehicle—you want to be able to easily and quickly go back and find out what you did, why you did it, how you did it and what the outcome was. It is super important, especially for the collision industry, because we do so much business with insurance companies.”
The Problem
Collision repair shops have always kept records, but the process by which those records are kept has changed drastically over the years. Gone are the days when a shop could operate effectively with paper records and a filing cabinet, says Bullard. These days, if you’re not using the latest management software, you’re losing out on potential profit.
“Being accurate and organized and having a really good description of what happened and why it happened is essential to getting paid,” says Bullard. “The way to make money in the collision industry is to make sure that you're literally charging everything that you can legitimately charge the insurance company. If you don't document properly—the way the insurance companies want it documented—you're either not going to get paid or you're going to get paid a lot less.”
The level of detail this necessitates is impossible to achieve without the help of management software, in Bullard’s opinion. Without it, he says, you're going to have a hard time painting an accurate picture, not only for the insurance company but for your customers, too.
There's also the matter of warranty issues—if you can't quickly find the answer to what was done on the car in the past, you could spend hours trying to figure out what happened.
“It's all about time and money in the collision industry,” Bullard says. “It's about efficiency and making sure that you're billing for everything that’s fixed. If you're not keeping records, you'll go broke, plain and simple.”
Another big issue, says Bullard, is liability. Cars today have highly advanced ADAS components that must be calibrated with razor precision to avoid a malfunction that could result in another accident. And the exact fix needs to be documented with as much detail as possible, to protect you and your shop from litigation.
“I really don’t think most shops understand the amount of liability they have with modern vehicles,” Bullard warns. “If you have to go to court or if there is some question as to what was done and how it was done … if you have a good description on a repair that was fixed correctly, it protects you from litigation. If you don’t, you’re in trouble.”
“Also, I might have to prove to the IRS how much money I made, and how and why I made it so that I don't get audited,” he adds. “There's multiple ways that having really good record keeping and a great story is beneficial to the business itself.”
The Solution
The best solution? A record-keeping software system designed specifically for collision shops.
“If you don’t have this kind of system,” Bullard says, “it will drive you out of business. I'm not trying to sell management systems … I just think that business is so much more complicated today than it was even ten years ago, and there's just no way to run your business properly without it.”
Once upon a time, he says, you could purchase a management system for your shop and use it indefinitely. But those days have come to an end. Technology is changing so quickly that it’s impossible for the older systems to keep up, and shops need a system that can be updated regularly so it doesn’t become outdated.
“A system that was written in the last five years is, in my opinion, exceptionally better than a system that was written 15 years ago. I’ve seen a lot of people try to limp their older systems along and it results in a lot of headaches and wasted time.”
To find the best solution for your shop, Bullard suggests asking for recommendations in online collision groups, or doing a quick Google search. Take note of which systems keep popping up.
Once you’ve narrowed it down, compare what they offer for training, and pick the one with the most robust support.
The Aftermath
“Whenever you're going to implement a system like this it's a big deal,” cautions Bullard. “There's a three to six-month learning curve. It’s disruptive, and you just have to plan for the disruption. But it’s certainly worth it.”
Bullard says many companies have online training built into their program, but make sure you verify exactly what kind of training and support resources the system has in place before making a decision. Proper training is essential for a successful transition.
“In my opinion, it’s usually worth spending the money to bring somebody in to work with your staff, kind of hand in hand over some period of time,” Bullard says. “Because again, if you're not doing it right, especially in the collision industry, you can lose tens of thousands of dollars over a couple of months in billing. And so, you've got to make sure that not only do you know how to use the system, but you know how to use it to write the story that needs to be told for the insurance company.”
Bullard is also of the mindset that there’s no better way to learn than to dive in headfirst. Get the training, he says, then go live and “fight your way through it.” Don’t spend any more time than you have to straddling two different record-keeping systems.
“You need two things to be successful in anything—one is knowledge,” says Bullard. “You can get the knowledge through training. Some systems have online training, some of them don't. Some of them will send somebody out or you send your people to them. Most today have something online. I see a lot of shops that are afraid to dive in the deep end though, so to speak, and fully immerse themselves in the transition. At some point you have to just get in the pool and swim, because experience is the second key to success. Knowledge can only take you so far. Experience drives you the rest of the way.”
The Takeaway
The bottom line? Good record keeping is good business.
Keeping accurate records not only allows you to better communicate with your customers and provide better customer service, it gives you the information you need to receive maximum insurance reimbursement and protects you from liability.
Ask yourself “what's the complaint of the customer?” and “what's the cause and what was the cure?” If you have a way to document that in detail, in a system that’s easy to search and refer back to, you’re golden.
