Policy Costs (Bodyshop)

Policy Costs (Bodyshop)

"Certainly, we'll rectify that for you right now."

Guideline: Own Policy

Description:

This term refers to those costs that must be borne by the Bodyshop that cannot be reclaimed or charged on to warranty or any other Department.

Example:

Let's say that three days ago you repaired a vehicle and now the customer has returned to you because one of the doors is not fitting properly.

Naturally, you cannot expect the customer to pay any more money, as they have already paid for the job. Therefore you agree to rectify the problem for the customer, and the question is who pays the bill?

Discussion:

Since this job is the direct responsibility of the Bodyshop, it cannot be charged onto warranty or any other department and therefore the hours spent on the rectification is accounted for within Policy Costs in your management accounts.

Whilst this is a simplistic explanation, the same holds true for any other work that you conduct that cannot be charged elsewhere.

The time may come where you may choose to rectify some work on a customer's vehicle that is not of your doing and you offer to do the work as a gesture of goodwill.

Related Terminology:

This term is also known as Policy Adjustments, Goodwill or Rectification.

» Motor Retail Terminology and Concepts