Why its important to implement
Without formal written approval, business has no legal claim for payment. Verbal approvals create payment risks from claim investigations or denial situations.
Private Work Approval Requirements
In the case of additional work paid for privately by the owner of the vehicle, if the body shop does not have formal written approval by email, or message then the body shop is at risk that the owner may deny the approval.
Investigation and Legal Issues
In some cases, there could be an investigation into an illegal claim, or the driver may be facing legal issues due to having the accident under the influence of alcohol for example and then the claim would be denied, and all work completed would not have to be paid for by the work provider.
Payment Risk Mitigation
If the body shop decides to begin work even with a verbal only approval, they are at risk of carrying out repairs without payment.
Legal Claim Protection
Without formal approval for repairs to begin the body shop has no legal claim to charge for work that is carried out and or completed.
Business Impact
No approval means business pays for parts and labor if work denied. Unapproved work blocks bays and wastes administration time pursuing payment.
Profit
If no approval is received prior to beginning work the business may have to pay for the parts and labour themselves if the work is then not approved.
General and Body and Paint Productivity
If work begins on a non-approved for repair job and then work is later stopped this will affect the productivity flow in the shop due to a vehicle taking up a bay if it is larger repair and wheel or steering parts are removed, this removing the ability for the technician to carry out other work.
Additional Administration Work
If the repair is denied after work begins or is completed and then payment is denied the business will waste time trying to get the owner of the vehicle to pay.
action steps
Implement formal written approval processes before any work begins, regularly check compliance, enforce policy with warnings.
Approval Policy Enforcement
Regularly check that this is being carried out for every job, strong internal warnings if policy not followed once established.
Formal Approval Process
Implement process to allow no work to be carried out on a vehicle unless formal written approval is received.
Related tasks
Milestone:
02: Streamlining VDA Processes