KPM Blog

Shop Labor – The Other Inventory

Posted by Glenn Beyerl on August 26, 2015 at 6:14 PM
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As a dealer, you likely devote a fair amount of time to inventory management, right? Parts to keep your customers going, the optimal level, make-up and display of equipment to maximize your sales? Of course! But what about the other inventory you purchase with each payroll? That’s right, shop labor inventory! And it already has an established retail price, your posted shop labor rate.

Without utilizing, capturing, billing and collecting on this labor properly, this inventory becomes obsolete, and quickly. Bill Bohmer of Jerkins Creative Consulting sees it this way; “It’s not part of the shelf, where we can see if it’s gone. We lose labor all the time because it’s intangible.”

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What do we mean by utilization?  Are the technicians’ talents used properly, such as for billable work? Capturing and recording billable work provides the information necessary to do your billing.  Timely information to do billing is critical, because as time passes, customers are further away from the repair or solution you’ve delivered.  On top of that, billing and collecting on service repairs should be done timely.  A prompt bill for services rendered will improve your chances of immediate payment.

We are proud to have worked with Bill Bohmer at Jerkins Creative Consulting and Bob Clements of Bob Clements International as part of our dealer education programs.  

Proper management of tangible and intangible inventory will increase profit margins for your dealership. Read about three additional ways to increase profits.

KPM has helped thousands of independent outdoor power equipment dealers for almost 60 years.  Contact us if you’re interested in how we can meet your individual dealer needs.

Topics: business, profit, labor, technician, billable time

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