employees. Fraud should never be taken lightly. It is a serious issue that warrants serious action. Help your new hires understand committing warranty fraud or performing unnecessary work will result in termination without warning or second chances. Implementing self-audits is a great way to help your team stay compliant. DESIGNATE A COMPLIANCE OFFICER Routine self-audit reviews are one of the best ways to ensure your program is compliant when an actual audit happens. Designate an employee as a compliance officer and assign them to regularly spot-checking claims and pulling a few job cards to check for complete, accurate information. You can direct them to conduct these weekly or monthly, but make sure it is consistent. Along with this, there are some important criteria to keep in mind: This position should be assigned to someone other than the service manager or an employee who is incentivized by closed claims or collected dollars. This is to make sure there is transparency and integrity in the process. Extra compensation can be considered for this person since their workload will increase, but their incentive should be based on a clean audit. Make sure their focus is on keeping all the dollars the dealership deserves instead of just closed claims or paid receivables. ELECTRONIC DOCUMENT STORAGE There’s no better time than now to invest in electronic document storage! Stuffed filing cabinets and overflowing document boxes can lead to disaster. A single missing document could result in a costly chargeback for your dealership. Using web-based software to scan and store documents electronically provides a simple solution with significant benefits. It can take your storage from looking like Grandma’s attic to an organizer’s dream. Even better, all documents become instantly available through a quick search, allowing you to compile required auditing materials in seconds instead of hours. Scanning may not be anyone’s favorite pastime, but it is essential. Scan all documents, including signed invoices, receipts, technician notes, diagnostic tests and warranty claim reimbursement forms. By using a document scanning provider, you can quickly locate all documentation associated with each VIN through web-based software, making the audit process painless and smooth. Typing each VIN into a search bar is much easier than searching through filing cabinets for hundreds of documents. This simple solution offers a big payoff. Like most things in life, an electronic storage system is only as good as what you put into it. Even the best storage system can’t compensate for careless and haphazard scanning. Assign one of your stronger employees who will have a direct role in the audit presentation process to organize the scanning. Their time will be worth keeping your business in order if it can prevent chargebacks. Given that the role has a direct impact on your bottom line and dealership health, it should not be put on the back burner for an entry-level clerical employee to tackle. HIRE PROFESSIONAL HELP Hire someone in the industry who is familiar with the warranty process. It will pay off in the long run by saving you time and money as well as relieving unnecessary stress — and who doesn’t need that? Make sure they follow best practices and document consistently with uniform standards. You will want them to customize internal auditing procedures for your specific dealership or dealer group. Many companies offer health checks if you don’t have the bandwidth to perform a self-audit. Others offer self-audit checklists so you can perform informal audits on a regular basis. It’s best to find someone with significant experience who has navigated the industry over a long period of time. If they have their finger on the pulse of the industry, and they can help get your employees working together as a team or better yet, help in the training process, it’s a no-brainer. Remember, those who are prepared need not panic. Have consistent policies in place, and be organized so you can put the cleanest, most complete repair orders in front of the manufacturer when they ask to review them. Know the manufacturer policy and procedure manual as well as your state laws so no dollars are taken from you unnecessarily. Review the final summary with your team to identify accountability. Then, make sure to retrain and update your process list so you know your dollars are protected. Follow our advice above, and audits will be a breeze. Get your dealership in order and make the stress of warranty audits a non-issue! Warranty Processing Company has been helping dealerships since 1986. They have a number of service plans to fit your needs. Their knowledge of cars, industry experience and extensive service background make them the perfect partner to increase your warranty gross profits. Justin Carr is the vice president of sales and marketing at Warranty Processing Company, which recently relocated to Texas. Justin works with dealers nationwide to increase efficiencies within service departments and educates dealer staff on why efficiencies. To learn more, visit warrantyprocessing.com. 24
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