Calculating flag time – also known as flat rate pay – for dealership service technicians can be a frustrating task for any service manager. Most dealerships still use antiquated spreadsheets to track flag time, and service managers spend a lot of time manually tracking and calculating technician pay. Not only does manual flag time tracking pose a risk for human error and potentially paying technicians below minimum wage, but it takes time and resources that could otherwise be spent doing more strategic work to help your dealership grow.

To spend less time on manual payroll tasks and improve overall efficiency at your dealership, you can integrate your dealer management system (DMS) with an integrated payroll and talent management provider. Following are several benefits of payroll and DMS integration:

Help Your Dealership Stay Profitable

One of the drawbacks of flag time calculations – especially if they’re not automated – is dealerships spend so much time calculating payroll, they likely don’t have time to regularly review flag time-related data. This can lead to repeatedly underestimating the time a service job takes, and therefore, undercharging for the job. Not only does this mean you’ll bring less money into the dealership for the service job, but you’ll have to find the budget elsewhere to pay your service technician for the extra time, which can lead to more lost profit.

By integrating your DMS with a payroll and talent management provider, you can better track instances of undercharging for a service job, and adjust pricing to improve profitability over time. You’ll also increase overall efficiency at your dealership by cutting back on the total number of people and time required to pay service technicians  For a given payroll, a technician might spend time jotting down hours on a Post-it note, then read it off to the service manager, who then writes or types it into a manual spreadsheet and passes it off to HR or payroll, who might re-enter the information yet again, depending on the process you have in place. Automated flag time calculations eliminate many of these steps so employees can reallocate their time to more strategic tasks.

Spend Time on More Strategic Work

Nobody wants to spend hours each day manually entering data into a spreadsheet. Manual flag time calculations take time away from the service manager’s day-to-day job – which can ultimately lead to the department servicing fewer cars and cause profitability to take a hit.

With automated flag time calculations, service managers can get back to more strategic aspects of the job. For example, as mentioned above, service managers can spend more time diving into data to increase the profitability of your dealership service department. They can also tap into this data to measure the productivity of each of your service technicians – and either elevate star employees or provide additional training to those who might be falling behind.

Service managers are also often on the front lines when interacting with customers. At many dealerships, service managers are the employees tasked with listening to customers’ descriptions of their vehicle problems – and relaying this information to service technicians. As time gets freed up from crunching numbers for flag time pay, service managers can spend more time with customers, enabling them to more accurately diagnose service requirements. This time can also be used as a sales opportunity – as service managers build relationships with customers, they can identify ways to maximize revenue with each visit – and encourage customers to become repeat visitors.

Ensure Complete Payroll Accuracy

If you don’t pay your employees with complete accuracy, chances are they won’t stay with your dealership for too long – and might even take legal action. In fact, unpaid overtime is one of the top causes of wage and hour lawsuits. An automated payroll experience helps you better track time and attendance – including flag time – and ensure you’re paying employees both accurately and on time, by removing the possibility of human error or a misplaced spreadsheet. And payroll accuracy also helps your dealership to maintain compliance with the Department of Labor.

Interested in determining whether or not your dealership is tracking flat time as efficiently as possible? Take our quiz, “Are You Tracking Flag Time Correctly?” below.

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