Alan Shotton, managing director of Boss Australia Services, says that many repairers are working on shop rates with NRMA Insurance that are too low.
Under NRMA's new times system, each shop that is doing its work must submit a cost profile that establishes its hourly rate. Various cost components are entered into the ‘Delloites calculator' which spits out a shop rate that is generally accepted by NRMA. But if the entries do not include all applicable costs, the resulting rate will be low.
Shotton says that his examination of some shops has actually shown them running at a loss on NRMA jobs. His company offers a service to assist with the data input - based on what it knows will be acceptable to NRMA Insurance. The service usually comes with a ‘health check' in which the whole shop's operating costs and systems are checked against Boss benchmarks. A health check, including assistance with the Delloites calculator costs $1200 which, Shotton maintains, could be paid back in one job.
NRMA says that it is happy to consider a revision of a shop's rate at any time but, in practical terms, the number of shops on NRMA's preferred list could crate congestion if many of them wanted revisions. Much better to get the rate right the first time around.
Shotton recommends that shops review their own rates at least once every three months, whether they intend to seek a revision with NRMA or not. In that way, good or bad trends are clearly visible.
In an upcoming issues of Paint & Panel Alan Shotton will discuss how shop owners deal with stress - of which there is no shortage at present. Maybe a holiday is needed, but who will run the shop? He suggests a solution.