Increase the Sale of Labor

• Time is Money

Did you know that car dealerships have a billing rate that ranges between 85% and 110%, while independent workshops average around 50%? So how is it that when a mechanic works hard all day with a well-deserved break, workshops in Quebec only manage to bill an average of 4 hours per day? Statistics from the Quebec industry show that between 0.25 and 0.5 hours per job are not billed.

• Tip 1: Understand Your Loss for Every Unbilled Minute

To fully grasp the importance of the tips that follow, it’s essential to know your per-minute rate. For example, if your hourly rate is $90, each minute represents $1.50 (calculation: hourly rate / 60 minutes).

Exercise: Calculate your rate per minute: ___________ $/minute

• Tip 2: Use a Time Clock

Simply starting to clock in a job with a wall-mounted time clock can increase your billing by 10-15 minutes. If you don’t use a time clock, the half-hour rule generally applies. When looking at invoices, you often see 1 hour, 1.5 hours, 2 hours, and 2.5 hours. Because we’re human and honest, and it’s easy to calculate in 30-minute increments, we tend to round down. As a result, there will always be unbilled time at the end of the day.

Here are two factors that contribute to decreased billed time:

• Mechanic: The desire to show efficiency… they skip time spent retrieving the vehicle, cleaning tools, washing hands, etc.
• Advisor: The ease of discounting a job. For instance, reducing time because the mechanic is well-equipped or experienced.

Using a time clock ensures billing for the correct time: the period during which the mechanic worked on the vehicle.

• Tip 3: Why bill in hundredths instead of minutes?

Dealerships have long used hundredths because it gives a sense of precision to your invoice. It also reduces client questions about billed hours. Finally, calculating the end time minus the start time is easier in hundredths. For example, it’s simpler to calculate the duration of a 1.51-hour job with a time clock when it starts at 9.27 and ends at 10.78 (10.78 - 9.27 = 1.51).

Most modern electronic time clocks offer the option to work in hundredths. To convert minutes into hundredths, divide the minutes by 60. For example, 35 minutes equals 0.55 hours (35 minutes / 60).

Exercise: 57 minutes = _________ hundredths of an hour

• Tip 4: Task Scheduling

When scheduling an appointment and preparing a job order, always start with the task billed by the hour versus a package or promotional deal. For instance, starting with a noise inspection before routine maintenance allows you to bill for time spent retrieving and lifting the vehicle.

Scenario 1: Package First

• 8:00 to 8:30 – vehicle entry and oil change
• 8:30 to 8:45 – inspection

• Billable time: 15 minutes

   

Scenario 2: Billable Time First

• 8:00 to 8:25 – vehicle entry and inspection (remove oil plug during inspection)
• 8:25 to 8:50 – oil change
• Billable time: 25 minutes

Exercise: How long does it take your mechanic to retrieve a vehicle? ____________

• Tip 5: GEM-CAR time ticket or electronic time clock?

The automotive industry typically uses a job order with a time ticket to mark the start and end of tasks, ensuring accurate billing. However, this practice often leaves gaps in billable time during transitions between tasks. This is why a management software with a time clock, like GEM-CAR, offers an innovative approach. With GEM-PUNCH, the mechanic stays clocked in until they indicate they're moving to the next job or an internal task.

With GEM-CAR’s electronic scheduling system, you automatically prioritize jobs for your mechanics. When a task is completed, the mechanic clocks into the next job or an internal task, saving an average of 4-5 minutes per invoice. The time clock also gives mechanics access to the vehicle’s maintenance history and a section for internal notes, leading them to engage more in the billing process and perform additional inspections that help sustain the business.

Advice: Don’t use the time clock to push your employees to work faster. While individual efficiency may increase, the quality of their work and their ability to spot future tasks are what ultimately pays the bills.