Charging Flat Rates

There are three methods of charging flat rates on work orders.

Mechanic Flat Rate (MMM): This method uses the hourly flat rate set in the employee file. A different flat rate can be set for each employee/mechanic. This rate is multiplied to the total labor hours posted on work orders.
System Flat Rate or Mechanic Flat Rate (SSM, switch 4 or MMM): This method uses the hourly flat rate set in the system parameters—which applies to all mechanics in all facilities OR the flate rate set in the employee file. The chosen flat rate is multiplied to the total labor hours posted on work orders.
Customer Flat Rate (MCF): This method allows flat rates to be set for specific jobs for customers. This option provides pricing consistency and makes quoting jobs possible. For example, if a flat rate of $75.00 is set for a battery replacement job, $75.00 will always be charged each time that job is performed regardless of the actual part cost or time spent on the job.

If you are interested in implementing the use of flat rates, read the following sections to determine which method best suits your needs.

Mechanic Flat Rates

This method is the most commonly used method. Although different labor rates can be defined for different employees/mechanics, usually the same flat shop rate is defined in all records. The total labor cost for jobs completed will vary depending on the actual time spent on the job. To use this method, do the following:

Add employee/mechanic records as needed.
In the Wages Tab, select Flat rate as the wage type.
Specify the flat rate to charge when labor is posted to work orders.

System or Mechanic Flat Rate

NOTE: There are slight differences when using this flat rate method with the Paperless Shop add-on. Please read through this section in its entirety before implementation.
This method uses either the flat rate set in the "Flat Labor Rate" switch in the Main System Parameters (SSM, switch 4) OR the flat rate set in the employee file (MMM). The benefit of using this flat rate method is that it helps to standardize the time charged for the work performed in your shop. This is accomplished by incorporating the use of the standard hours from the VMRS codes. The standard hours are referenced and displayed when labor entries are posted for a job. By always using the default time displayed, the time charged for that particular will be consistent. If needed, you can always override the defaults to charge more or less than the "standard job rate." For more information about estimated hours, refer to "How the System Determines the Estimated Time for a Job."
Before using this method for charging flat rates, a decision needs to be made on where the flat rate will come from—the "Flat Labor Rate" switch or the employee file.

Flat Labor Rate (SSM, switch 4): Using this flat rate allows one rate to be charged for labor, regardless of what the job is or who works on that job. The nice thing about going this route is that if you want to increase or decrease the labor rate, it requires one, simple change rather than having to make the changes in all employee records. If you have multiple facilities/shops set up in RTA and each shop charges a different labor rate, this method will not work for you.
Employee Flat Rate (MMM): This method works great if you want to charge different labor rates based on the mechanic completing the work. For example, one mechanic might always perform PM jobs, another might perform electrical repairs, while another performs engine rebuilds or overhauls, and so on. In any case, each mechanic can have a different flat rate set up in the employee file and the corresponding rate will be charged depending on who performed the work. Also, this method makes it possible for multiple facilities/shops to charge different flat rates.

The Setup:

Determine which flat rate will be charged by the system—the "Flat Labor Rate" switch OR the employee file.
Set the hourly labor rate as needed. Depending on the decision made in the previous step, the rate will either be set in the "Flat Labor Rate" switch in the Main System Parameters (SSM, switch 4) OR in the Flat rate field in the employee file (MMM, Wages tab).
Set the "Use Flat Rate/Valid Hours" switch in Miscellaneous Parameters I (SSI, Miscellaneous I tab, switch 42).
1. Calculate by Flat Rate: Select Yes to use this flat labor rate method.
2. Use System or Employee Rate: Select System to apply a single labor rate to all repairs (SSM, switch 4). Select Employee to charge multiple flat rates based on the mechanic who completes the job (MMM).
3. Non-Zero Labor Hours: Set this switch according to preference. Select Yes to require a non-zero value for the estimated hours (recommended setting for Paperless Shop users). When adding a work order line, if the estimated hours is 0.0, you'll be required to enter a new value before the job can be added to the work order. Select No to allow zero values for the estimated hours.
Review time standards in the VMRS code file (optional, but recommended). When adding a work order line, the system uses the estimated hours set in the VMRS codes.

The Procedure: Non-Paperless Shop Users
Once Calculate by Flat Rate is set to YES, an additional field appears in the Post Labor window (WW, WB). The system automatically displays the estimated hours (from the VMRS code) for the defaults to post.

In the Hours to post field, accept the default hours to charge or enter a new quantity. This number is multiplied to the labor rate to come up with the labor charge.
In the Hours worked field, accept the default hours or enter a new quantity. This number is used to update mechanic productivity statistics and does not affect the cost of the work order.

The Procedure: Paperless Shop Users
When this feature is implemented, mechanics can clock on and off jobs in the usual manner. There is no difference in the data entry process, but there is a difference in the way the labor cost is computed and charged out to work orders. When labor entries are processed through Paperless Shop, the estimated hours (from the VMRS code) are automatically used as the number of hours to charge on the work order (same as Hours to post described previously in step 1). The amount of time that the mechanic was clocked onto the job is used for productivity purposes (same as Hours worked). Realize that if Non-Zero Labor Hours is set to NO AND the estimated hours to complete a job is 0.0, a labor cost of $0.00 will be charged to the work order regardless of the amount of time the mechanic was clocked onto the job.
h1. Customer Flat Rates
The Customer Flat Rate feature allows flat rates to be charged by customer for specific jobs performed. This is useful when you charge a set amount for jobs regardless of the materials used or the labor involved. Flat rates are set up by customer, by job (VMRS code), for labor only, or for labor and parts. For example, a flat rate can be set up specifically for oil changes. You can then quote customers an exact price to complete that job. When an oil change is done for a vehicle belonging to that customer, the flat rate amount will be charged for that job. Actual parts used and/or labor hours can be posted to the work order to account for the time and materials; doing so does not increase the total job cost.
The Setup:

Set the "Use Customer Billing" switch in Main System Parameters to YES or REQUIRED (SSM, switch 31).
Set the customer number in the vehicle record (optional, MVM).
Add flat rate records as needed for your customers.

The Procedure:

Use the Work Order and Paperless Shop modules in the usual manner. When jobs are added to work orders, the system checks to see if a flat rate record with a matching customer number and VMRS code exists.
A flat parts charge, if any, is immediately applied after the Post Parts option is accessed (flat rate x job quantity).
A flat labor charge, if any, is immediately applied after the Post Labor option is accessed (flat rate x job quantity).

Adding a Flat Rate

To add a flat rate record, do the following:

Select Master > Customer > Flat Rates from the RTA main menu (MCF).
Enter a customer number or press F1 to select a customer from the lookup list.
Enter a VMRS code or press F1 to select a VMRS code from the lookup list. When a work order line is created using the specified customer and VMRS code, the flat rate amount will apply to that job.
Set the Flat Rate Code to FP to charge a flat rate for both labor and parts; set to FL to charge a flat rate for labor only.
Enter the flat rate parts cost. AND/OR
Enter the flat rate labor cost.
Save the record.

Changing a Flat Rate

You can adjust flat rate costs for parts and/or labor. Changes cannot be made to the customer number or VMRS code. To change a flat rate record, do the following:

Select Master > Customer > Flat Rates from the RTA main menu (MCF).
Press F2 to select an existing flat rate record from the lookup list. OR

Enter a customer number or press F1 to select a customer from the lookup list AND enter a VMRS code or press F1 to select a VMRS code from the lookup list.

Make the changes as needed.
Save the record.

Deleting a Flat Rate

To delete a flat rate record, do the following:

Select Master > Customer > Flat Rates from the RTA main menu (MCF).
Press F2 to select an existing flat rate record from the lookup list. OR