Let’s check out how to process a warranty repair due to an internal mistake at the shop. Track the repair to see the impact on our cost and profitability without passing that cost on to the customer, as well as maintain accurate record-keeping.
Tracking Warranty Services in Your Shop
Follow the steps below to keep track of the warranty services you provide in your shop.
1. Create a new service for your warranty repairs.
We recommend titling this service "Warranty Repair". This is where you can add subcontractors' work, labor, parts, etc. you use to complete the service.
For example, your shop might offer a tow service for warranty repairs. Within the Warranty Repair service, you would add a subcontract line item for the tow.
Pro Tip: Create a "Warranty" inventory category and use labels for more accurate reporting and tracking. Shopmonkey also recommends using the "Status" function to easily identify your warranty services in your Workflow.
2. Set the cost of your warranty service.
Setting the cost of the service to your shop will help you track your shop's expenses to fix the mistake.
3. Set the retail price to $0.00.
Ensure the retail price is set to $0.00 in the right-side panel to avoid charging your customer for warranty services.
4. Enter the number of billable labor hours.
Even though your shop isn't charging your customer for warranty work, you may want to add billable hours to make sure the technician's hours are tracked accurately. Even if your shop isn't paying your technician to fix the mistake, this step helps to track the cost the repair has on the shop. This time could've been spent on another job to generate money rather than costing the shop.
5. Keep track of labor costs.
Add a labor line item to the warranty service called "Warranty Labor". This will help track the costs of the warranty service for internal record-keeping. Even though the customer isn't being charged, the service and your technician's time are still costing your shop.
Labor costs are updated in the right-side panel and not on the retail hours of the line item. Check that the correct labor cost and hourly rate are included so that the shop accurately tracks profit & loss on this job.
Adding the labor cost depends on how you calculate your labor costs:
Flat rate: Labor costs will autofill
Hourly: Labor costs fields need to be entered manually
Tracking using the time clock: Labor costs will autofill
6. Add replacement parts and their cost.
Adding the cost of the parts will help you track expenses internally. Make sure that the retail cost in the right-side panel is set to $0.00 to avoid charging your customer for warranty work.
7. Authorize warranty services.
We recommend that your shop authorizes warranty services performed for your internal record keeping. Since the customer has already paid, it isn't necessary for the work to be authorized, but here are a few benefits of authorizing:
Keep track of labor costs
Record notes about the service
Provide a date and time stamp of the service writer's authorization
Provide more context should someone need to check the history and details of this particular service
8. Save your warranty service as a canned service.
Canned services will allow you to quickly add the service for future warranty repairs. Creating the canned service also allows you to view reports of all warranty work and associated costs.
Warranty Service Reporting and Record Keeping
Use reports to gain insight into warranty service expenses and their impact on your shop.
Profit Report
Check out the profitability report in the right-side panel to see how much loss your shop is absorbing on a specific warranty repair.
Canned Service Summary
In the Canned Service Summary Report (Reports > Canned Service Summary), you can see all of the warranty repairs that were done within a given period of time and the amount of loss at the shop. This can be really valuable information in determining the next steps or identifying patterns of behavior that you can then quickly remedy.
You will also be able to see each individual invoice within the warranty canned service for more details on the cost of each service performed.
Line Item Detail Report
Another place to go is the Line Item Detail report (Reports > Parts & Line Items Sold > Line Item Detail). Since we categorized each line item as ‘Warranty’ we can see all the warranty work that has filtered through our shop and have reference to the order number.
Pro Tip: The additional filter type “Labor” gives you the option to see assigned technicians who are performing warranty work. This can help you to determine which technicians perform warranty repairs more often.
Parts Workflow
Quickly view which parts were replaced, damaged, etc. in your Parts Workflow. This can be helpful to view after warranty services are performed to keep track of inventory or to determine which parts need to be returned to a vendor. Adding the "Warranty" status label to each of your parts makes the Parts Workflow a valuable tool for managing inventory.
Still have questions? Feel free to reach out to us through the Chat Icon in the bottom right corner of your screen. Thanks for reading!