Comeback & Warranty Tracking In SE

[crabtree1]

Hello Tim,

Happy New Year
I have a question about how to track my comeback/warranty parts and labor.
We are concerned that our profit reports are incorrect.

When a part is defective we have the customer come back in. We start a new RO and put the replacement part and labor on it.

We use a "warranty" coupon to 00.00 out the labor
We are charged for the part so we put the part on the ticket normally and then we 00.00 out the
"price" of the part.

Our labor is refunded with a credit from our vendor
The part is charged and then credited on our statement.

We are concerned that our reports for the parts coming into the shop and going out without a profit skew the profit reports and the labor profit reports will also be skewed.

How does the system handle the warranty parts? How is does the system handle the labor. How are others handling this problem.

BTW - I searched the Forum for how others are handling this problem but my search must not have been very good on the search of "warranty" or "comeback" - nothing on how to handle the paperwork side of the problem.
Thanks - Paula

[timbre4]

Happy New Year Paula!

Forum shops will have differing answers; I know that it's been discussed previously. Search on Comeback had 115 results (posts), some were more about customer policy. There may be some up-to-date commentary coming, in the meantime, try these I found on pages 2-3:

http://managerforum.net/viewtopic.php?f ... ack#p56081
http://managerforum.net/viewtopic.php?f ... ack#p61973
http://managerforum.net/viewtopic.php?f ... 310#p41310
http://managerforum.net/viewtopic.php?f ... ack#p39918

[ricmorin]

We are concerned that our reports for the parts coming into the shop and going out without a profit skew the profit reports and the labor profit reports will also be skewed.

I can't speak for you, but our comebacks are so few that any skewing of reports is minimal. We have a very specific routine for comebacks depending on the cause. I've outlined it before in a previous thread but it probably won't work for everyone.

If you have a defective part, just zero out the cost and sell prices as long as your supplier is taking care of the part. That should have no effect on your profit report. Your warranty coupon for labor is a great idea as it tracks how many times you have to use it. That will affect your labor profit report, but it should. You WANT that, don't you? Putting in parts for free under warranty is not desirable. You need to see that in the reports. IF you are getting reimbursed for all or some of the labor, leave that abount as due and pay it down when you get it from your parts supplier. Any differences should be paid down with the coupon. With that approach, your reports will reflect your profit correctly.