When you get an estimate from someone else, how do you know it is proper or accurate for this repair and your repair criteria?
A painful line-by-line review might be the only way. It's only painful because we're more accustomed to focusing on repairs, production and customer service. Finding an easy way to quickly review these estimates can add to profitability, but comes only from practice and experience.
Of course, your first check would be to make sure nothing is missing. Easier said than done, and easier done with a pre-planned list of items your shop needs, including hazardous waste allowance, tire disposal fee and stripping materials. There are even automated programs that can do this for you on estimates you write or have in your system.
Manual entries have all non-database information, even if the estimating system allows an easy way to insert them as pre-stored items. For example, Hazardous Waste Removal is a common manual entry, and each estimating system has a way of easily entering it. However, any amount entered is still a judgment amount.
Are all manual entry price amounts correctly identified? Should they be sublet, aftermarket or something else? Are the labor amounts set for the proper category? Should they be Sheet Metal, Refinishing or something else? Are any markups or discounts clearly identified? Are notes added to explain? Remember, an estimate is written for more than just the writer. It is written for any future estimate reader to easily understand. If you have questions, ask them.
Another tedious step is checking the tax calculations. Are replacement part types accurately identified and correctly taxed? This is even more complicated with tiered taxes.
How is tax applied to salvage parts, markup, sublet, itemized materials, paint materials and anything else that lies outside regular part replacements? Do you know how to identify taxed items on each estimating system? If not, ask, or, because we generally like to figure things out ourselves, use a calculator to figure tax the way you know it should be. Any differences could then be investigated.
Are you in a tiered-tax jurisdiction? (Tiered tax is set by law in some jurisdictions for different volumes of sales. For example, it may be 6.5 percent on the first $5,000 and 6 percent on any sales above that.) What are your rates for the first and second tiers, if any? Can you see if they are properly applied?
Is clearcoat calculated on the estimate for any parts requiring two-stage edging? Here you must know how each system works in order to check it quickly. Audatex automatically does this for replaced parts if "Two-Stage – Interior" is selected as an option. CCC's Pathways shows it as a separate line item. Mitchell identifies it with a "C" next to the refinish amount.
Is clearcoat calculated for any needed interior panels, such as a radiator support or frame rail? As above, know how each system shows this information.
Have all of the needed adjustments been made on a supplement? If a repaired part was replaced, is the refinishing still appropriate? If the original refinish amount was overridden, has it been changed back to let the estimating system calculate it properly for the now-replaced part? If a replaced part was repaired instead, does the estimate still allow for refinish/clearcoat on the edges if still needed?
It's those small details that can add up to big dollars. It takes time, patience and preparation. With practice, estimate reviews can be an efficient standard operating procedure leading to increased profitability — and increased profitability is what keeps businesses in business.
"Scout Motto: Be Prepared." — Boy Scouts of America
Bruce Burrow, AAM started writing estimates over 30 years ago, has worked for most of the information providers, and, as an independent instructor for the last 10 years, has trained estimators all across North America. He is ASE Master certified and an instructor for the Automotive Management Institute. Send questions, ideas and comments that you would like to see addressed here to [email protected] and stay tuned.
