Your goal… to research claims eligible for payment and determine what should be written off.
Before starting, there are two things you should always remember before cleaning up an accounting schedule:
- Set an internal limit for write-offs. Don't waste time chasing around a few bucks. Setting 0.2 hrs multiplied by your warranty labor rate is usually a good place to start.
- Write off all claims over one year old.
Begin by running a fresh copy of the warranty receivables schedule. Refer to any previous schedules containing notes in order to assist you. Retrieve every repair order listed on the schedule (except those listed in the "current" section). As you review the claims, determine the last action taken. If you think the claim may be eligible for payment, but you don't know what action to take, seek assistance.
Claims over 3 months (Chrysler, 6 months (GM) old may be eligible for payment. If you plan on submitting anything over 90 days old (Chrysler) or 180 days old (GM), call your Factory Service Representative first and ask if your claims are eligible. Some do not accept over age claims. Be prepared to offer a reasonable explanation and assure your factory representative that you are taking steps to get your claims under control.
When you determine the appropriate action for each claim, note it on the schedule. If you find areas of concern, you must find the root of the problem. For example, if you discover a balance for a deductible amount, check the accounting copy to see if the customer has paid. If not, determine why it wasn't and take steps to collect your money.
No amount should be removed from the books without a General Journal Voucher (GJV). The service manager should first approve any write-offs. Some stores require the dealer principal to approve all write-offs. After all, it is their money.
Try this formula.
It should show you exactly where your warranty receivables are
right now.
We hope these tips help. If
you need additional assistance, we offer
a complete warranty claims cleanup service. We not only
get your claims paid, we find additional missed revenue (and
collect it). This missed revenue alone usually
pays for our service. > Learn
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