This article covers the mechanic flat rate system and review how to set it up. Instructions for going live as well as policies, procedures and best practices to implement will all be found in the information to follow.
It is important to understand what changes will take effect once we configure the system for flat rates. Basically when a time is keyed into the billable column that time becomes the flat rate for the repair. Once the job is completed the mechanic will be paid whatever time is shown in that box.
Flag Times pull from the actual date the mechanic clocks in and out of the system to do the work. Flag hours are best used in shops that pay their mechanics hourly. These times reflect the actual time a mechanic spent working on a RO.
The image below shows that the flat rate time for this repair is 4 hours.
Important: Flag Hours will only work if you pay your mechanics hourly. If you adjust a mechanic’s payable times and the user makes the adjustment in the system AFTER payroll was done for that week, the adjustment won’t be paid out. This is because the system is looking for Flagged dates only.
Payable Times look at the date the payable hours were entered in. While payable hours usually match flag hours, by using the date the payable hours were keyed in, if an adjustment is made it will show up in whatever payroll period the user keys the adjustment in.
Payable hours must be used if you are paying your mechanics flat rate amounts.
How Payable Hours Work
When the job line is marked as completed in the Flag Times tab (Figure 2), the billable hours will automatically change the payable hours to reflect the flat rate amount.
In the scenario listed above, the mechanic will be back flagged .22 hours once the job is completed. If you ran a Flag report, you would see that the mechanic put 4.22 hours in, however, a Payable report will include the adjustment to back flag the mechanic and set his or her payable hours to 4.
View Calculation of Hours
To see this calculation click on the “Hours” button at the bottom of the RO.
Once the Modify Flag Times screen appears, click on the payable hours and you will see the calculations that the system uses to figure out the payable amount for the mechanic.
In the top line, you see that the mechanic completed 4.22 hours of work on 5/20. However, the job itself was not completed until 5/23 when a back flag of .22 was added. As of 5/23 this mechanic would receive a total of 4 hours pay for this job.
It is critical that advisors complete jobs as soon as possible or mechanics may be overpaid in one payroll and receive a large number of chargebacks in another. Establishing a policy of reviewing and completing as many jobs as possible on the last day of your pay period will help to alleviate this issue.