Save with The Leading Hand

The Leading Hand is a great investment for your workshop.  Used properly, you can expect big savings to your cost of operation. Let's look at the sums using a hypothetical workshop.

XYZ Auto Repairs is a two person workshop, where the paperwork is done manually.  They work on about six vehicles a day and are open five days per week.  This adds up to around 220 working days a year taking into account public holidays, which equates to 1320 vehicles per year.  Including overheads, each person working at the workshop, costs XYZ Auto Repairs $23 per hour.

Invoices take an average of fifteen minutes each to write manually.  This will be reduced to five minutes using The Leading Hand; saving ten minutes per invoice.  They will contain more detail, look more professional and save XYZ Auto Repairs 10 x 1320 = 13,200 minutes or 220 hours per year.

XYZ Auto Repairs carries about $200,000 in stock which needs to be managed.  Done properly, this takes about sixty minutes per day.  With The Leading Hand it will take only ten minutes per day, thus saving fifty minutes a day or 183 hours per year.

If XYZ Auto Repairs does not manage its stock, keeping an eye on what is held and what it costs, it can expect stock on hand value to blow-out to $300,000.  That is, $100,000 in extra stock being held.  At 8% interest this adds up to an extra expense for the business of $8,000 pa. Stock management with The Leading Hand is accurate and efficient – and saves money.

If a customer makes a claim, and XYZ hasn't got good Vehicle Maintenance Records, at best it will have a drawn out dispute.  At worst, it could cost plenty!  The Leading Hand gives quality maintenance records that will help avoid unjustified claims.

Another time and money waster for XYZ Auto Repairs is chasing Accounts.  With The Leading Hand it can expect to know exactly how much money is owed.  Manual accounts often result in customers simply not being charged.  With a manual system a business can expect three extra hours of work a day in preparing statements and chasing accounts (adding up to 660 hours a year).  Manual invoice errors can cost XYZ Auto Repairs $2,000 a year in lost revenue. Small items not charged can be estimated at $10 per vehicle per service.  That is $13,200 in lost revenue!

 

The table below is based on 220 working days and 1320 vehicles being worked on per year.

Operation Time Saved/Day Time Saved/Vehicle Time Saved/Day (hrs) Saving at $23/hr
Invoicing 10 mins 220 hrs $5,060
Stock Management 183 hrs $4,209
Accounts 3 hrs 660 hrs $15,180
Total 1,063 hrs $24,449

 

Looking at the above table, which involves just Invoicing, Stock Management and Accounting, The Leading Hand can save XYZ Auto Repairs 1,063 hours or $24,449 per year.

Add to that $2,000 in invoice error savings and we come to over $26,000 in annual savings!  This does not include the $13,200 in extra revenue from small items charged, or the saving of a blow-out in stock.  And, this does not take into account the savings generated from the countless productivity features of The Leading Hand, or the extra revenue The Leading Hand can generate from reminder letters!

Remember, these figures are for a hypothetical workshop, and will vary from business to business.  However, the order of magnitude should be correct and will give you an idea of what your workshop can save.

You will look far and wide to find an investment that will match the return of The Leading Hand.  Although most workshop owners enjoy running their workshop, at the end of the day it must make a profit.  With The Leading Hand, you will turn profits into PROFIT$!

This article was originally published in "The Automotive Engineer", the official journal of the Institute of Automotive Mechanical Engineers.

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