A Repair Order (RO) is more than just a piece of paper or a digital record. It's the heartbeat of every dealership service department. It tracks the who, what, when, and how of service work done on a vehicle. Every RO represents a vital transaction, from routine maintenance to major repairs, and it impacts nearly every department in your dealership.
ROs are classified by the party footing the bill: Customer ROs, Warranty ROs, and Internal ROs.
Now, we’re not RO experts (or looking to be), but we work with dealerships every day and see how much rides on this single document. Plainly put- ROs are complex. More than you might think. Why? Service advisors, technicians, accounting, and even customers use them. They have different reasons and expectations. To do our job well, we focus on how ROs affect dealership commissions and employee pay.
Let’s break down the essentials of ROs, why they matter, and how they keep the gears turning at your dealership. In this article, we’ll break down:
- The core concepts of an RO and its types: Customer Pay, Warranty, and Internal ROs.
- The lifecycle of an RO and how it moves through your dealership.
- What different departments want from an RO and how they interact with it.
The Basics of a Repair Order
An RO is created any time a dealership performs service work on a vehicle, whether for a customer, under warranty, or on dealership-owned inventory. It provides a detailed record of the job, outlining the work performed, the parts used, and the associated costs.
It is the key tool for authorizing, tracking, and completing repairs. It is a snapshot and a historical record of a service transaction. It is a living document. It evolves from when a customer enters the service bay to when the work is complete, paid for, and payed out on.
But here’s the catch: an RO isn’t just one thing to one person. It’s a single document with a hundred uses, each shaped by the needs of those handling it. Technicians see it as a roadmap; service advisors treat it as a customer conversation log; parts managers view it as an inventory checklist. And every one of these perspectives shapes how the RO travels through the dealership ecosystem.
The Lifecycle of an RO
ROs don’t happen in isolation—they follow a lifecycle that touches multiple roles and departments:
1. Initiation: The process starts with a request—from a customer, manufacturer, or dealership team.
2. Creation: Service advisors document concerns, assign work, and generate the RO.
3. Execution: Technicians perform diagnostics and repairs, documenting their work along the way.
4. Approval: Repairs are reviewed, and costs are finalized for billing.
5. Completion: The RO is closed out, and commissions are calculated where applicable.
Every step needs teamwork and clear communication. So, ROs are key for transparency and efficiency.
The Different Types of ROs
Not all ROs are created equal. Here’s a quick rundown of the main types, with links to deeper dives on each:
• Customer ROs: These are entirely customer-funded, covering everything from oil changes to major repairs. They’re a key revenue driver and the backbone of your service department.
• Warranty ROs: Funded by the manufacturer, these ROs cover warranty repairs, recalls, and some routine maintenance. They’re crucial for customer satisfaction and maintaining manufacturer compliance.
• Internal ROs: Used for dealership-owned vehicles, these ROs support reconditioning inventory, maintaining fleet vehicles, and demo cars.
Each type serves a unique purpose and involves different stakeholders.
How Different Roles See and Use the RO
The beauty—and challenge—of the RO is that it means different things to different people. Here’s how various roles interact with ROs, what they want from them, and how they use them:
Service Department
Perspective: “It’s the playbook for getting the job done.”
What They Want: Accurate customer concerns, clear diagnostic steps, and well-documented technician work.
How They Use It: To assign jobs, track progress, and ensure quality control.
Key Frustrations: Missing information, unclear customer complaints, or miscommunication between teams.
Parts Department
Perspective: “It’s our shopping list.”
What They Want: Precise part numbers, quantities, and details about what’s required for the repair.
How They Use It: To pull, order, and track inventory for repairs and maintenance.
Key Frustrations: Incomplete ROs or last-minute changes that disrupt workflow and inventory counts.
Technicians
Perspective: “It’s the roadmap to fixing the vehicle.”
What They Want: Clear diagnostic instructions, realistic labor times, and any necessary parts ready to go.
How They Use It: To perform the actual repair work and document findings or further needs.
Key Frustrations: Ambiguous instructions, insufficient diagnostic time, or unavailable parts.
Service Advisors
Perspective: “It’s the communication tool between the customer and the shop.”
What They Want: A smooth way to gather customer input, generate estimates, and update repair statuses.
How They Use It: To keep customers informed, manage approvals, and ensure technicians have what they need.
Key Frustrations: Delayed approvals, unclear customer concerns, or issues translating tech findings into customer-friendly language.
Accounting
Perspective: “It’s the financial record of the job.”
What They Want: Precise cost allocations, accurate billing details, and compliance with dealership and manufacturer policies.
How They Use It: To reconcile revenue, track labor and parts costs, and ensure commission payouts align with work completed.
Key Frustrations: Errors in cost coding or incomplete information that delays closeouts and payroll.
Sales Department
Perspective: “It’s a line item that impacts our profit margin.”
What They Want: Efficient reconditioning processes and accurate cost tracking for used inventory.
How They Use It: To evaluate how service costs affect vehicle pricing and profitability.
Key Frustrations: High reconditioning costs or delays in getting inventory retail-ready.
Dealership Owners/Managers
Perspective: “It’s a performance and profitability metric.”
What They Want: High-level insights into labor efficiency, parts utilization, and RO profitability.
How They Use It: To assess department performance and identify opportunities for improvement.
Key Frustrations: Lack of transparency or reporting that obscures inefficiencies or missed opportunities.
The Customer
Perspective: “It’s the proof that my car is getting fixed.”
What They Want: Simple, clear communication about what’s being done, why, and how much it will cost.
How They Use It: To track repair progress, approve work, and ensure their needs are met.
Key Frustrations: Confusing jargon, unexpected charges, or poor updates on repair status.
ROs, Commissions: Who Cares?
Repair Orders (ROs) aren’t just pieces of paper or digital files—they’re the backbone of dealership operations. They connect departments, ensure customer satisfaction, and provide clear pathways for profitability. Each type of repair order serves a distinct purpose. A Customer Pay RO, a Warranty RO, and an Internal RO ensure transparency, efficiency, and financial accountability.
For employees, ROs determine commissions and serve as proof of work. For dealerships, they’re a tool for managing workflows and measuring success. And for customers, they’re a promise of trust, transparency, and professionalism. With every department relying on the RO in some capacity, optimizing its management is non-negotiable.
ROs are directly linked to commission calculations for service advisors and technicians. Accurate ROs ensure that commissioned employees are properly compensated for their work. Integrating Nimble Compensation's solutions with your DMS will automate commission calculations at dealerships. It will ensure accurate, timely payouts and reduce all that excess admin work that come with ROs.
How other dealerships use RO in pay plans?
Stay tuned. Here's where we'll share some ideas we see from our customers!
