How To Find Your Effective Labor Rate
By Sandi Jerome
It is 5:00 p.m.... do you know what your Effective Labor Rate was for the day? E.L.R. is one of the primary benchmarks of overall service department gross profit efficiency. We know that it should be measured, but how can we measure without reviewing hundreds of repair orders by hand? Just use your ADP, EDS, R+R or UCS computer system. This column is a compilation of the responses to How do I find my Effective Labor Rate? from the support and marketing departments of the major DMS providers.
For ADP Users
All ADP Service software releases since January 1999 (version 620 or 920 or higher) have the reporting tools that divide the total customer pay hours by the customer flat rate hours to produce an accurate and up-to-date figure of your effective labor rate. How do I print this information, you're asking? Just go to RAP. No, not the music but the function, which stands for Report Service Productivity. Why not RSP? Well frankly, that acronym has already been taken, and we all know how much ADP loves creating new ones. Once at the selection menu you can request either summary or detailed E.L.R. information for any or all service advisors and labor "transaction" types. You can even combine a minimum effective labor rate and hours per repair order to produce a great service advisor coaching tool. In addition, RAP also prints labor and part sales figures, repair order counts, sales by zip code, and much more. So you say that you have looked for RAP and your software hasn't been updated? Well the information is still there, it just has to be extracted by other means. Just have your resident English and Report Generator guru or ADP support create a report from the History file that totals labor sales and flat rate hours by only those labor types that start with the letter "C" (customer pay). It will be a no-frill report, but will get the job done until you start RAP-ing. Submitted by Chuck Elliott, senior consultant - ASC, Automotive Service Consultants, Div. of Automatic Data Processing.
For EDS Users
The Effective Labor Rate Report details labor charges and hours, the cost and gross amounts, and calculates the effective labor rate for each service order, service advisor, and for the company overall. This report is based on service orders in the following status: Approved, Claim Pending, Claim Submitted, Rejected, and Closed.
Steps To Print The Report:
- 1 DEALERLINE XL SERVICELINE or DMS@NET Service Main Menu, select Reports/Merchandising.
- 2 Report/Merchandising Menu, select Analysis Reports.
- 3 Analysis Report Menu, select Effective Labor Rate Report.
Information That Prints On Report:
- Service Order Number and Service Advisor Number
- Competitive Labor and Hours: Labor amount is derived from the Sale Rate Code entered in the Competitive fields on the Effective Labor Rate Selection window. (Competitive Labor Amount + Distributed Labor Amount.) Hours amount is derived from the labor hours (either billed or derived), multiplied by the Distributed Labor Percentage. This amount is then added to labor hours. Competitive Labor Hours + Labor Hours *Distributed Labor Percentage)
- Regular Labor and Hours: Labor amount is derived from the Sale Rate Code entered in the Regular fields on the Effective Labor Rate Selection window. (Regular Labor amount + Distributed Labor Amount.) Hours amount is derived from the labor hours (either billed or derived) multiplied by the Distributed Labor Percentage. This amount is then added to labor hours. (Regular Labor Hours + Labor Hours *Distributed Labor Percentage.)
- Repair and Labor and Hours: Labor amount is derived from the Sale Rate Code entered on the Effective Labor Rate Selection window. If the sale rate code does not match the Competitive or Regular, add Distributed Labor Amount to Regular Labor Amount. This amount is then put in Repair field on report. (Regular Labor amount + Distributed Labor Amount.) Hours amount is derived from the Labor Hours (either billed or derived) multiplied by the Distributed Labor Percentage. This amount is then added to Labor Hours. (Repair Labor Hours + Labor Hours *Distributed Labor Percentage)
- Total Labor: Total Labor is the Competitive, Regular and Repair Labor added together for the Service Order.
- Total Hours: Total Hours is the Competitive, Regular and Repair hours added together for the Service Order.
- Total Cost: Total Cost is the cost for the labor of the Technician that has completed the repair.
- Gross: Gross is the difference in the Total Labor Competitive, Regular, and Repair added and Total Cost (Labor Cost for Technician) Total Labor--Total Cost.
- Effective Labor Rate: Effective Labor Rate is the amount that is calculated from dividing Total Labor by Total Hours. Contributed by Tina Mazzola of EDS Product Support.
For UCS Users
Program 269-04 produces an Advisor/Technician Profit & Performance Report that lists sales and gross profit figures and allows you to examine effective labor rates by advisor, technician, or repair order. You can list effective labor rates for individual line items, entire ROs, and/or pay types, as well as display labor rate averages for each technician and advisor. If desired, you can also obtain a report containing only specific operation codes. The labor rate on the report can also take into account discounts given to customers at invoice time and is an excellent tool for detecting operations that generate results below your posted labor rate. Submitted by Landis Martin, UCS Marketing Representative.
For R+R Users
The Reynolds ERA system calculates an Effective Labor Rate and displays that amount through the use of Report Generator (6910). There are six separate reports that display the information for Warranty, Customer Pay or Internal pay types in either detail or summary format. A date range enables the user to isolate a single day or any time period desired (days, weeks, or months).
To run the reports, use executable 6910 (Report Generator). At the "REPORT NAME" prompt, enter a "?", and select the report that is required. The effective labor rate reports are:
- EFFECTIVE RATE -CUSTOMER PAY,
- EFFECTIVE RATE - CUSTOMER PAY SUMMARY ONLY,
- EFFECTIVE RATE -WARRANTY,
- EFFECTIVE RATE - WARRANTY SUMMARY ONLY,
- EFFECTIVE RATE -INTERNAL
- EFFECTIVE RATE - INTERNAL SUMMARY ONLY.
After the report is loaded and the cursor is at the command line, enter "P" to print the reports, or "O" to view the report on the screen. Enter the beginning date and the ending date as prompted in the MM/DD/YY format. The report will then calculate and print or display on the screen. Submitted by Charlie Phillips, ERA Product Management.
Sandi Jerome is the editor of Digital Dealer magazine and owner of Sandi Jerome Computer Consulting. sjerome@dealeronline.com
Back To Table of Contents • Digital Dealer Home Page • e-mail
