Working with a dealership recently, we found that their warranty claim receivable schedule was far outside the normal industry parameters. When asked about it, stacks of completed repair orders were produced. It seems that they just needed a "final evaluation" before submitting the claim.

While we promote the careful review of warranty claims, especially for deficiencies that could cause a chargeback, we are not in favor of systems that leave large sums of money in desk drawers, or in claims piled around the dealership.

You have a number of masters to serve when it comes to handling and submitting GM warranty claims. You do want to: 

u  Make sure that the claims are as free of errors as possible, minimizing rejects.

u   Make sure that the claims do not contain deviations from policy that would
allow future chargebacks of any amounts collected.

u Make sure that the claims are processed for payment as quickly as possible.

Many dealers would reverse the order of this list, and we have no argument. These objectives should be co-equal, with no greater emphasis placed on one over another. It is maintaining the balance of these goals that is important.

Unfortunately, dealerships often do emphasize one function over another. In one recent example, over-control resulted from a rather nasty audit review from the zone. During the post-audit shuffle the warranty administrator was fired, and the service manager was demoted.

The clear reasons for this weren't communicated well with the rest of the staff and the new warranty administrator sat in fear that she too would be given the axe for even the most honest of errors. Once she was reassured that there is a difference between the mistakes of a diligent employee and out-right cheating and lying, the receivable schedule began to come into line.

While making sure the claim complies with GM policy is a good goal, an unreasonable delay can occur in dealerships that stress the elimination of the errors that could cause claim rejection. We often find that this additional step in the process causes a severe slowdown in claim processing and a concurrent growth in the warranty receivables account.

You can over-manage the system. What you should be concerned about in this type of claim review is that the data on the claim will be payable. Will GM pay it or not?

Instead of getting in the way of the process by looking for perfect submissions, we think it is better to sometimes let the process tell you what is wrong with the claim. This is especially true for some of the newer warranty administrators out there. Then you can work to eliminate similar errors in the future. Using this process, you get the payable claims through the system quickly. You also get a clear and concise picture of what needs to be corrected when you work through those that are rejected.

Learn to "manage the exceptions." Manage the things that go wrong with an eye toward identifying the source of the errors and counseling those responsible. In most cases, holding up the payment of acceptable claims for such a review is just unnecessary and often masks the real source of the problem.

Make sure that you identify the source of any mistakes. We find that most errors are repetitive and a single error type will affect many claims. By going to the source of the problem you can then work to stop it from happening again.

In dealerships with claim review systems that examine claims before they are submitted, errors are often corrected by the reviewer but never brought to the attention of the person who makes the mistake. When this happens, the errors will keep happening. Your claim submissions may be cleaner, but the review process continues to be cumbersome and it will eventually slow down payment.

Attacking your rejects in the suggested manner serves two of the masters listed above. You get paid quickly and you also work toward eliminating mistakes in claim data that may cause rejection.