Financial Controls Revisited – Open Parts Tickets & Repair Orders

Financial Controls Revisited – Open Parts Tickets & Repair Orders

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The checklist of items that an Office Manager/Controller must review at month end includes the reconciliation of work-in-process and the parts inventory counter pad to the general ledger. But does your financial controls review also include an examination of open parts tickets and repair orders and their aging?

Below are questions to consider when performing this financial controls review:

  • Does the dealership have a policy in place that addresses the timely payment of employee purchases of service and parts? Is this policy communicated to all employees and is it enforced by management? As a side note, many dealerships have employees pay for their purchases from the dealership through payroll deductions…this is not recommended due to potential issues with the Department of Labor.
  • Are there aged open parts tickets for customers who are classified as cash customers? If there are, steps should be taken immediately to cease that practice.
  • Are there open repair orders for cash customers whose work is completed but haven’t paid their bill? Do you check periodically to see if the car(s) on aged open repair orders are still on the lot?
  • Are there open repair orders for cars that have been abandoned by customers? If so, has your
    Service Manager pursued any collection efforts?
  • Is there a missing document report set up for service & parts tickets and, if so, is it reviewed and compared to the WIP reports at month end? Are missing documents addressed with the department managers promptly?

Adding this review to the month end financial controls checklist will provide an additional layer of accountability from the Service & Parts departments and minimize the exposure of uncollected receivables.

The bottom line is that service or parts invoices that are complete but not paid for should be closed promptly. The open parts and repair order reports should not be used as a temporary charge account by Service & Parts departments.

Patricia Smolanoff
T 732-763-0902
[email protected]

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