So You’re Going To Be Audited…
A warranty audit can be a very tense time in any dealership.Everyone is on edge waiting to find out what the outcome is going to be and the fallout from it. Is the charge back going to be big? Is anyone going to be fired over it? Where are the fingers going to be pointed?
With all the uncertainly that comes from an audit, your best bet is to be prepared. If the audit letter has already come and the visit is scheduled, you need to be ready to handle it so the disruption is minimal to your daily operations.
During an audit it’s important to make sure you have some control over the proceedings. You want to keep the auditor(s) under control. You have the right to lay down some ground rules as well; you have the right to conduct business without undo disturbances. Here are a few ways to do that and make the audit run smoother.
1. The auditor(s) should be put in an office as far away from the service department as possible. Necessities such as a phone (with a phone list of the liaison’s extension), copier and coffee maker should be available to them in the office or within the shortest distance possible from the office. You want to limit their time walking around the dealership.
2. Designate a liaison to deal with the auditor(s). This should be the service manager. The liaison will be the person the auditors will call upon when they have a request or a question.
3. Clean the shop! It doesn’t have to look like an operating room but you should feel comfortable showing it off to visitors. Technician benches should be the main target of a cleaning. Nothing looks more suspicious than old parts sitting around under a technician’s bench and this includes boxes of partially used rebuild and reseal kits. If any of the parts belong to a technician, tell them to take them out of the shop for the duration
of the audit otherwise return them to the parts department or throw them in the trash.
4. Clean the service area of paperwork. No need to look disorganized. A disorganized desk is a signal to any auditor that the claims they are about to review are in the same condition.
5. Clean up around the building. From time to time an auditor will take a walk to clear their mind and get the circulation back in their legs. While they’re taking a walk around the building, you don’t want them finding a pile of old warranty parts that they may want to start looking through.
6. Get your parts scrapping up-to-date. A few days before the auditors come, make sure any parts that can be scrapped are scrapped. Don’t let them sit in a pile behind the dealership. Do it early enough so the parts are hauled off with the rest of the trash. It is also a good time to send any cores back for credit that you may have sitting around. Make sure no boxes from aftermarket parts are in the scrapping area or behind the parts counter.
7. Remove any sale displays for aftermarket parts. There’s no need for the manufacturer to find out you are pushing products that aren’t theirs.
8. Have a pre-audit meeting with everyone in the dealership. A separate shop meeting should happen about a week before the audit. This is when cleaning the shop should be brought up. A meeting with all dealership personnel should happen the day before the arrival of the auditors. Advise them not to discuss anything with the auditors. If the auditor asks them any questions, tell them to direct the auditor(s) to the designated liaison.
9. Keep a daily log of audit activities. Anything of importance discussed with the auditors should be written down. You may want to do use a tape recorder to take your notes instead of writing them down.
10. Assign the auditors a nice, convenient parking space, as close to the entrance they will be using. The number of on-site vehicles the auditor will want to check the vehicle histories of is directly proportional to how far away he/she is parked from the entrance they will use.
11. Audio tape the exit meeting. Before you take this step, we ask that you discuss this with your legal counsel. He/she should be able to tell you whether you will be able to legally do this with the consent of only one party (you).
By organizing yourself before the audit starts, you will alleviate some of the anxiety that comes with an audit and avoid some charge backs that disorganization can bring on. Auditors not only look at the claims but the condition and organization of the dealership as a whole and take it all into consideration when deciding on the full scope of the audit.
