Your Bodyshop will have a published labour rate per hour, but how
often are you able to charge this amount to every customer on every job?
Recovery Rate tells you how much revenue you have actually recovered per Hour Sold as opposed to how much you would have generated should you have applied your full charge out rate.
Example:
A) Labour Sales = R33,731 B) Hours Sold = 875 C) Recovery Rate = R38.55 (A ÷ B)
Discussion:
The
reality of the situation confirms that you are often forced to provide
a discount in some instances, especially to Insurance Companies, which of course reduces the amount of
revenue that you are able to collect. The question is how much money
have you managed to recover?
The
key to success with this KPI is to capture individual Recovery Rates
for each income sector (See Labour Sales Mix) so that you can
accurately pinpoint the areas in which discount is being given.