Flat Rate Calculator
Flat Rate Calculator is a tool for bodyshops that use a team approach. In other words shops that use the flat rate system, yet have more than one person working on every vehicle will find this tool useful. Instead of trying to break up metal and paint labor and distributing it among different departments and different techs, shops that use the team approach can use this calculator to more fairly distribute labor.
Flat Rate Calculator is a simple tool for making complicated distribution of flat rate hours fast, easy, and most importantly, fair. If you are running a departmentalized bodyshop, in other words, a team approach, consider using this calculator and the methods described below to distribute your flat rate hours among your techs. If your painter is making a lot more money than your metal techs, and working roughly the same number of hours, your system may be flawed.
Features of Flat Rate Calculator
First and foremost, Flat Rate Calculator is completely free! Download it from this website and begin using it today at no charge. Because this is such a simple tool, and I feel strongly that many shops are distributing flat rate labor unfairly among their techs, I am giving it away.
First, let’s take a look at the calculator, and then I’ll describe how it works.
At the top you type in the number of total repair hours in an estimate. This is the total of metal, paint, mechanical….etc. This figure goes in the “Total Hours Paid” box. In the left column you type in your technicians’ names or ID numbers. You can only use the white colored rows. The “Hourly Personnel” row cannot be changed. In the next column, “Hours Worked,” type in next to the tech’s name the number of hours each tech actually has into the repair. The “Total Hours Worked” label and the “Efficiency” label are automatically updated as you move to the next tech.
The next columns, “Extra Hours” and “Total” are updated also. The “Extra Hours” are the additional hour each tech should receive based on what he has contributed to the repair.
At the very top of the window is a check box called “Distribute Hourly Personnel Labor.” Notice below how everything changes with this box unchecked.
The flat rate techs all get fewer extra hours. Why have this option? Obviously, if you have hourly technicians you are not going to distribute to them extra flat rate hours. That would defeat the purpose of hourly techs. Hourly techs can be used in flat rate shops to clean up the building, or to clean up cars. In my shop, I use them to do both. But to make sure you track exactly how much time each vehicle takes, you need the hourly techs punching on an off every vehicle they work on. You may decide to keep the box unchecked and pay yourself, the shop, the extra labor time the hourly techs would have had coming if they were paid flat rate.
However, most hourly techs are paid less than flat rate techs, costing the shop less for every hour they work. In today’s competitive employment market, with the difficulty shops have finding good help, you may want to check this box and distribute this extra labor evenly among the flat rate techs. I do this in my shop. I still get paid for every hour my hourly techs put into every repair, but I just don’t profit from their work as much. As an added incentive to keep my good help, I split the extra time among them.
Why this system works.
This system works because it promotes teamwork. Since I developed this system, my shop efficiency has improved dramatically and my techs work together as a team much better than before. Here’s why.
Techs who think they will benefit by cutting corners or passing their work on to the next tech in the “assembly line” soon learn that they just hurt themselves. If my prep person has to do something my metal tech should have done, chances are it’s going to take the prepper longer to do it, which in turn hurts the jobs efficiency, and that hurts the metal tech’s pocket. Each tech checks the last guys work because they all know re-dos will cost everyone dearly. Each tech realizes that what they do affects the other guy’s wallet, and what the other guy does affects their wallet. Soon they learn to work together, to figure out who does what best. Slackers aren’t tolerated by the rest of the team, and hackers quickly learn to clean up their act because they lose money when less skilled techs have to fix their messes.
If a tech thinks he’ll get more of the extra flat rate time by spending more time on the job, he soon learns this doesn’t work either. His extra time hurts the job’s efficiency, which actually reduces his extra time.
This system isn’t perfect. On jobs that just don’t go well, everyone thinks they are getting screwed. And if someone screws up in the “assembly line” you sometimes have to make some manual adjustments to be fair. For instance, if the painter screws up and has to repaint a car, you may want to make some manual adjustments so everyone doesn’t suffer. All your techs must be proficient and they must be willing, or trainable, to work as a team. The key is to have an open book policy, and to use this calculator as a visual tool to show your techs how it works, and how everyone’s efforts affects everyone else.
Good Luck. Feel free to email me with any questions, or read my article in BodyShop Business.
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