Service Department Financial Indicators

There are numerous indicators available to management that contribute to an in-depth analysis of the financial health of the workshop. Each provides a detail that enables maximisation of workshop profit.

Listed alphabetically below are typical examples of financial indicators in commonly use:

  1. Actual Turn-over as a % of Potential Turn-over
  2. Average Hours per Job Card
  3. Average Labour Value per Job Card
  4. Cash Sales
  5. Departmental Expenses as a % of Gross Profit
  6. Direct Expenses
  7. Fix Right First Time (from OE CSI, as a measurement of inefficiency and lost revenues in rework)
  8. Gross Profit as a % of Total Service Turnover
  9. Indirect Expenses
  10. Internal Labour Sales as a % of Total Labour Sales
  11. Labour Gross Profit
  12. Net Profit per Hour Sold
  13. Parts Value per Job Card
  14. Parts Value to Labour Sales Ratio
  15. Productive Costs per Hour
  16. Retail Labour Sales as a % of Total Labour Sales
  17. Service and Motor Plans Payment as a % of Submissions
  18. Sublet as % of Turn-over
  19. Support Costs per Hour
  20. Total Labour Sales as a % of Total Turn-over
  21. Upsell Value per Job Card (excluding Warranty and Internal)
  22. Warranty Chargeback as a % of Total Warranty Submissions
  23. Warranty Labour Sales as a % of Total Labour Sales
  24. Warranty Payments as a % of Total Warranty Submissions
  25. Workshop Debtors
  26. Workshop Jobs per Head Per Day
  27. Workshop overhead Absorption
  28. Workshop Profit as a % of Total Service Turnover
  29. Workshop Revenue per Head Per Day

In addition to the above, the Support Staff ratio should be monitored. This benchmark will indicate if the dealership has too many support staff (non-productive staff) relative to productive staff. Productive Staff is those selling labour hours and include Technicians, Working Foremen, and apprentices. Non-Productive staff includes ALL OTHER workshop staff. The desired ratio of Technicians to Support Staff is in the region 2,7-3, however, there are many dealerships operating at values of 1.7 or less.

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