Monthly SPOTLIGHT!

Repair Orders: Get it Right by Writing it Right

"Write it Clear and Keep it Clear" 

 

Hello Industry Members:

 

With this installment of our series on “Get It Right by Writing It Right” we are focusing on Invoices. During this series of articles, we have been looking at the Bureau of Automotive Repair (BAR) Regulations and how they relate to successfully transacting with your customers. The invoice is the main device for documenting the transaction and outlines the legal relationship between you and your customer. Because of the importance of this document it is critical to make sure you are following all the rules and regulations regarding this so you can protect “both” your customer and your operation.

 

You can look at the last three installment articles as a repair order book with chapters breaking down each element. Each page within each chapter outlines the steps necessary to provide a compliant document. The invoice is the last chapter and must describe the repair and service transaction contracted between you and your customer from the beginning estimate all the way to the final invoice. With the BAR, I was taught when reviewing a repair order for compliance to always look at the invoice first. The invoice should indicate/show what was or was not done during the contracted transaction. Then you look at the original estimate for a proper customer’s signature and the estimated dollar amount. Both things together tell the story of the repair order (RO) compliance.

 

Invoice

The invoice to be provided to the customer is required to show the facility’ repair dealers registration number (ARD) and corresponding business name, address and EPA #, and if your facility charges for Hazardous Waste. The invoice is required to describe all parts, services and repairs (labor) for a specific job that has been authorized and performed. The invoice should itemize and clearly show the price for all labor and each part installed. Everything should be in terminology that the customer can understand.  Remember that It makes no difference if the transaction is for a Customer Pay, No Charge or Warranty service. If the job is a No Charge or Warranty, the invoice needs to state the charges to the customer such as “No Charge”. All of these aspects together must tell the complete RO story.

 

Services and Repairs

A lot of facilities use electronic Point of Sale systems that create the ROs that describe each service such as oil changes etc. The shop enters an article or job number and providing it was created properly in the system it prepopulates the estimate and invoice with the specific services describing labor and parts, in a legal format. Then what remains are the invoice prices for the labor and parts to complete the invoice. There are also electronic systems where the estimate automatically includes the labor prices and parts prices that carry over to the invoice. These types of description meet the requirements both for a specific estimate and a specific job on the invoice.

 

When writing up a repair and diagnostic type RO, the facility needs to understand, as discussed in a prior article, that the estimate needs to be specific as to the customer complaint and what the facility will do for that complaint (check and advise, repair, etc.). Again, if the estimate is done correctly, that wording will carry over into the invoice and becomes the documentation for the specific job. By law, the facility is required to describe the diagnostics, verifying the cause of the complaint and the repair and parts used to correct the problem.  Some in our industry describe this as the 3 C’s which are the Complaint, Cause and Correction. The Bureau of Automotive Repair recommends your invoice needs to be written at a 6th grade level to limit any misunderstandings. With this in mind remember do not use abbreviations and acronyms to avoid compliance issues with BAR and for better customer understanding of what services were performed.

                                                                                                        

Parts and Fees                      

By law the invoice is to describe the parts used so that the customer can understand what parts they are purchasing and their prices. Don’t use abbreviations and acronyms when describing parts, so as to meet the customer understanding aspect. The customer is also to know if the parts installed are new, used, rebuilt or reconditioned.  For Rebuilt Automatic Transmissions, you are allowed to use, the terms exchange, rebuilt, remanufactured, reconditioned and overhauled. Auto Body has additional requirements for crash parts. When using parts kits (with several components) you are required to show the brand name and part number of the kit used. When charging Hazardous Waste Fees, the above applies. 

 

Subtotals

The invoice is to contain subtotal prices for all service/repair work performed. The invoice is also to contain subtotal prices for all parts supplied. Tax subtotals, when applicable, need to be listed. In some invoices “Misc. Charges” and “Less Third Party” are found as headings in the subtotals. The customer must understand what these charges are for when used by the facility. This is usually an area that is forgotten.  The best way to do this is in the body of the invoice where these charges show up add the wording “Misc. Charges” or “Less Third Party”.                               

 

Examples:

  • Oil and Filter Hazardous Fees (Misc. Charges) $1.26 
  • 10% Discount (Less Third Party) - $15.00 

 

This way the customer can see and understand why and where these subtotal amounts came from. Remember the BAR does not allow separate charges for shop supplies, administrative fees, etc. These types of charges are considered the cost of doing business and should be included in your cost per job pricing and/or labor rate pricing.

 

Specialized Services (A/C and Windshield Glass)

The law requires that when you are servicing A/C systems and or repairing and replacing A/C pressurized components, there are additional requirements you must meet. When servicing/recharging the refrigerant system, you are required on the invoice to show “Perform a 16-Item Procedure/Inspection” with the last two items being readings for high and low pressure and the center outlet temperature. I have seen where facilities list all 16 items with readings in the body of the invoice or in a separate document that list, the complete 16 items with readings which must include the RO number. Lastly, I have seen an overall statement shortened up to cover all 16 items with readings. All three ways are legal with the proper wording.

 

For Windshields and Glass Installation the estimate is required to state the installation will prevent vehicle operation for a time period and if the part is original equipment manufacturer or non-original equipment manufacturer. For the invoice the same applies and in addition the facility is required to state the cure time and the time the glass installation was completed.        

 

Additional Authorization

The invoice needs to show any changes in method of repair and the customer authorization and additional cost for these changes. This is also known as additional authorization and unusual circumstances as described in the last installment article. Remember there are 7 items to document: the time and date contacted, how contacted, who was contacted, the reason for the contact, additional repair cost and the new estimate total.  If you are going to use the Acknowledgment Notice for Oral Consent, be sure and use the exact law wording and have the customer sign/initial only when there is customer additional authorization documented on the invoice. Some facilities always have the customer sign this notice even though there was no additional authorization, which would be considered an untrue statement. 

 

Signatures

Industry attorneys recommend that you have a main signature block for your customer to sign, confirming the end of the customer contracted services or repairs with your facility. They also recommend using wording in this signature block that describes the customer receiving a copy of the invoice and the vehicle. Always have this signed. If your invoice has additional built-in legal notices that require customer signatures, don’t forget to have your customer sign these too. Often these notices are designed to protect the facility’s assets. I’ve seen a lot of these notices not signed and forgotten. Lastly, I will occasionally see notations in the body of the invoice that have signature/initial blocks to notate something you want the customer to be aware of. Example: “Customer declined recommended front brake service ____________.” With this notice, be sure to list the services declined and have the customer sign or initial this block. Most of the time I don’t see this block signed or initialed. Industry attorneys recommend when using a signature/initial blocks, always have the customer sign/initial these for additional notice. No signature or initials in the blocks could cause legal issues. So, do one of two things, always sign/initial these blocks or remove the signature/initial block altogether and leave the statement only. Signed/initialed or removed blocks both are legal if the main signature block is signed. Not signed can be a way out for one of those professional consumers that want to use the lack of signature/initials to their advantage.                                                   

 

Supporting Documents                      

When using supporting documents for Customer Authorization, Multi-Point Inspection, Alignment Reports, Battery Test, Smog Vehicle Inspection Reports and Invoices from other sources, etc. they are required to contain a unique identifier.  The identifier is to link them to each customer’s repair transaction, which is usually the RO Number. The BAR recommends using the RO# for the identifier linkage. Remember, by law a facility is required to maintain all repair transaction records for three years. This includes all supporting documents.

 

As we have said in the past articles, in many cases customers complain either because their vehicle wasn’t serviced or repaired to their satisfaction or they didn’t understand what happened or it didn’t fix the problem. This installment article for invoices continues along the lines of the customer understanding the story of what was done to help keep your customer informed and coming back.

 

Stay tuned for our next article dealing with the Selling of Maintenance Services.

 

-Jerry Froehlich

 

JBS “Advisement for Automotive Repair and BAR Issues”

Email: Jerryjbs50@gmail.com Phone 909-649-5599           

 

 

Lunch and Learn January 22nd 2019 at 12:30pm - 2:00pm

at the UTI Sacramento Campus.

CalABC Lunch and Learn Location

4100 Duckhorn Dr. Sacramento, CA 95834

916-263-9100 Adrian

Come to our lunch and learn and hear Ms. Holly Tinloy - Senior Deputy Labor Commissioner.  www.dir.ca.gov/dlse.

 

Ms. Tinloy has been asked to cover the laws surrounding the following topics:

  • Technician Compensation - Post Gonzales v. L.A. Downtown Motors Decision which eliminated the Flat Rate Compensation program.
  • Rest & Meal Break Period Guidelines.
  • Wage Order 9 Requiring Double the Minimum Wage Rate for Technicians who provide their own tools.

Please keep in mind that Ms. Tinloy does not provide legal advice or DLSE's position on these topics but will be covering the laws and how they are applied.

 

Special Event:

Mr. Mike Correra who is "The Car Guy", Client Experience Specialist with DealerBuilt, will be discussing how to improve your customer interactions through effective follow up and documentation services.

 

DealerBuilt makes an intellegent, user-friendly dealer management system that liberates auto dealers to chose how best to modernize. Learn more about them at https://dealerbuilt.com

 

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If you would like to attend be sure to contact our 

Executive Director 

Johan Gallo at 

949-433-4513

or email gallojm1@outlook.com

Upcoming Events

CalABC Board Mtg. April 22 2020

 

 

 

BAR Advisory Meeting April 23 2020

 

 

 

 

 

CalABC Board Mtg. July 15th 2020

 

 

BAR Advisory Meeting July 16th 2020

 

 

 

 

 

CalABC Board Mtg. October 21, 2020

 

 

 

BAR Advisory Meeting October 22, 2010

 

 

CalABC Board Meetings: General Session 2:00 pm - 4:45 pm. Closed Session 5:00 pm - 5:30 pm. Location at UTI Sacramento Campus.

 

2019 BAR Advisory Meetings: 9:30 am - 1:00 pm / Special Afternoon Sessions TBA 2:00 pm - 4:00 pm. Location at the Department of Consumer Affairs HQ! Hearing Room 102 1625 North Market Blvd. Sacramento, CA 95834

 

 

CalABC Board Meetings: General Session 2:00 pm - 4:45 pm. Closed Session 5:00 pm - 5:30 pm. Location at UTI Sacramento Campus.

 

2019 BAR Advisory Meetings: 9:30 am - 1:00 pm / Special Afternoon Sessions TBA 2:00 pm - 4:00 pm. Location at the Department of Consumer Affairs HQ! Hearing Room 102 1625 North Market Blvd. Sacramento, CA 95834

 

 

CalABC Board Meetings: General Session 2:00 pm - 4:45 pm. Closed Session 5:00 pm - 5:30 pm. Location at UTI Sacramento Campus.

 

2019 BAR Advisory Meetings: 9:30 am - 1:00 pm / Special Afternoon Sessions TBA 2:00 pm - 4:00 pm. Location at the Department of Consumer Affairs HQ! Hearing Room 102 1625 North Market Blvd. Sacramento, CA 95834

CalABC Membership Information - Join Today!

 

Download CalABC Membership Application Form

 

Visit our website at www.calabc.org to look at our accomplishments along with other interesting items.  We thank you for your time and hope you will join CalABC and become a member today. Help us work on key areas for the betterment of our industry, consumers and the agencies who regulate and impact our businesses.

 

Please don't hesitate to call me for any of our board members for more information. You can also find out more by visiting our website at: www.calabc.org

 

Looking forward to your participation,

 

-Johan

 

Johan Gallo

Executive Director, CalABC

P: 949-433-4513

E: gallojm1@outlook.com

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Contact us at info@calabc.org for more information.

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CalABC Office: 2200 L Street, Sacramento, CA 95816

P: 949-433-4513 / F: 925-369-0420 / E: info@calabc@org



Sunday, December 8, 2019







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