[ADAS Calibration Billing] How to Properly Charge for Diagnostic Time

Proper calibration services can boost shop revenue, but one question that comes up over and over again is vital: How do you accurately charge for ADAS diagnostic time?

Diagnostic time refers to the billable time your shop spends performing a diagnostic evaluation of a vehicle for ADAS calibration. 

While there is a wide variance in the collision repair industry in the duration of a specific ADAS calibration (15 minutes to over an hour), it’s important to stay well within the range to limit insurance claim denials and to build trust with your customer base.

Billing for diagnostic time could add additional revenue to your repair shop, and it’s likely something your competitors are already doing. 

There’s no simple answer to how your shop should bill for diagnostic time, there exists a wide range of methods and challenges across the industry. In this guide we will identify these different challenges and strategies deployed by others to help you make your choice.

Key components of billable ADAS diagnostic time

There are three important components of ADAS diagnostic evaluations: Pre-calibration diagnostic work, active calibration time, and post-calibration validation. All three of these phases are vital to quality work, and all three are billable. Let’s look at what you need to consider in each phase.

Pre-Calibration Diagnostic Work

Before any calibration, your technician performs a top-to-bottom evaluation of the vehicle to see what can and should be serviced. 
For example, some pre-calibration diagnostic work can include:

• VIN decoding and system identification: 10-15 minutes
• OEM requirement research: 30-60 minutes (without proper tools)
• Pre-scan diagnostic: 5-10 minutes
• Equipment setup and preparation: 20-45 minutes

All in all, your technician could spend anywhere from 1 hour to over 2 hours before the actual calibration begins. This is valuable time for your shop and should be earning you revenue.

Active Calibration Time

Active calibration time refers to how long it takes your technician to perform the calibration itself. This seems straightforward, but remember, there are different stages of calibration.

Your technician will likely need to perform both static calibrations (where the vehicle is stationary) and dynamic calibrations (where the vehicle is in motion or simulated to be in motion). Also, it is common that when one ADAS feature needs calibration, others do as well.

Of course, the environment, equipment, and experience level have a big impact on calibration time. Due to the wide variation of these factors, there can be large discrepancies in how long the actual calibration takes. 

In some scenarios, active calibration time can thus consist of:

• Static calibrations: 30 minutes to 2 hours
• Dynamic calibrations: 30 minutes to 1 hour
• Multiple system calibrations: Can exceed 3 hours

After this, the work is still not done; now the technician must verify their work.

Post-Calibration Verification

Before you can hand the vehicle back to its owner, you have to verify that the ADAS systems have been properly calibrated. This also takes time, which is billable as well. 

This post-calibration verification can include:

• System verification scan: 10-15 minutes
• Road test validation: 15-20 minutes
• Documentation and reporting: 10-15 minutes

Putting all of this together, your shop is missing out on income if you only charge for the calibration itself. Pre- and post-calibration work can amount to 2-4 additional hours of labor that you may not be charging for.

But it’s important to note that you also cannot overbill for services that other shops can do much quicker or else you run the risk of insurance claim denials, losing trust with customers, and falling further behind competitors.

Let’s explore how other ADAS professionals are approaching ADAS calibration billing.

ADAS Billing Structure and Implementation

Not all collision shops are built the same, and therefore, there is much industry variance on how they decide to bill for ADAS calibration. While billing comes in all shapes and sizes, your work should maximize revenue, while ensuring quality, safety standards, and customer trust. Let’s look at some strategies employed by other ADAS professionals.

Tiered Pricing Model

A tiered pricing model refers to a billing strategy that weighs specific ADAS features by their calibration duration and difficulty. This is pretty straightforward: the more intense the calibration, the more expensive it is.

For example, a fender bender may only require calibration to a singular radar system used for Blind Spot Monitoring (BSM). This specific calibration wouldl not cost your shop as much time as the numerous calibrations needed to service an ESC system. 

This is the purpose of tiered pricing: to ensure simpler, standalone calibrations are cheaper than more complex jobs. 

This tiered pricing method can also be applied to specific vehicles, where ADAS features on a luxury or foreign vehicle may be more tedious to service than a standard American car.

Labor Rate Categories

Labor rate charging can refer to the time duration measures that were previously mentioned. Following this model, your shop would bill an hourly rate for all of the labor related to the ADAS calibration process.

Your shop could charge different rates for research and identification time, calibration, and verification, or you could charge the same flat ADAS labor rates throughout the entire process.

Some shops also charge additional fees for equipment setup and for verification testing. While vital not to undercharge and forgo revenue, it's equally important not to “double-dip”, or charge these standalone fees while also including the related labor time charge in the final bill. This approach is a fast track to losing customers’ trust.

Common Billing Challenges and Solutions

While ensuring that your shop increases both revenue and industry trustworthiness, understanding what to bill for can present some challenges. Addressing these challenges head-on can help you stay ahead of competitors and secure your shop’s place in the neighborhood for years to come.

Let’s look at some of these billing challenges and potential strategies to overcome them.

Time Estimation Issues

One of the most common challenges when it comes to ADAS diagnostic billing is undercharging. This can come in two forms:

• Underestimating the time it will take to complete a calibration
• Undervaluing pre- and post-calibration work and therefore not charging enough for labor

Understanding how long a specific calibration will take your technicians is vital for both time estimation and being able to accurately quote customers a fair price. 

Two ways that your shop can overcome these challenges are:

• Perform test runs for all possible ADAS calibrations with your technicians to understand how long specific services will take your shop from top to bottom
• Reach out to contacts in the industry to see what they are charging for labor time, equipment setup, and verification procedures

Understanding what goes into each calibration and your shop’s capabilities can go a long way toward knowing how to accurately bill for these services.

Documentation Gaps

Another huge challenge in accurate ADAS calibration pricing is related to documentation. Your shop must keep tidy paperwork and stay organized to maximize ADAS calibration billing and revenue. 

Incomplete or shoddy documentation records can look like:

• Missing OEM requirement records
• Incomplete time logs
• Poor note-taking when communicating with customers

All of these can lead to a huge waste of time, inaccurate billing, and an inefficient way to run a shop. In order to justify what you are billing, you must keep top-notch documentation to reduce insurance claim denials and maintain trust with customers. 

Revv can help address this problem head-on. Your shop will never worry about documentation when integrated with our platform.

Technology Integration Problems

We are at a major precipice in the auto repair industry, as the high-tech and increasingly integrated manufacturers are forcing the aftermarket to adapt. While today’s factories are equipped with OEM-specific and accurate machines, auto collision shops are often still oriented to by-hand service, including billing.

There are also limitations to some shop management systems; they are pricey, you must train techs on their use, they lack flexibility for rapid changes, and may present some difficulty in integrating with other systems.

Customer and Insurance Communication Strategies

Perhaps the largest struggle when it comes to ADAS calibration billing is communicating and justifying charges with customers and insurance companies. This can present a large final challenge after your shop has already gone through the headache of determining what to charge.

Imagine you have developed a strategy for everything: labor time rates, premium specialty services, and setup charges. You have already completed the service and billed the customer or insurance agency, and now you find yourself having to justify the charge. 

Below are some strategies to avoid confrontation with an angry customer and to avoid a claim denial from the insurance agency.

Customer Education Approaches

You can have a script prepared for dealing with customers who may have questions about what you’re charging them for. Simply walking the customer through the entire process, highlighting the value of your quality work and the importance of their safety and industry standards, can go a long way in easing potential worries.

Insurance Adjuster Relations

Dealing with insurance agencies takes a much different approach. This is exactly what Revv is built for. Here, you must provide proper documentation that justifies the service you performed, and also justifies the billing strategy. Revv uses AI to auto-generate these forms and takes all the stress off you, by directly dealing with the challenge of insurance agencies questioning the necessity of the service.

Dispute Resolution Protocols

While it may not happen often, either a customer or an insurance agency may dispute your charges. If so, it’s important to have a protocol for dealing with this possibility. As a shop manager, you can develop methods such as:

• Having prepared responses in case a claim is denied or a customer is displeased
• Have a backup plan in case the initial charges are deemed impermissible by a party
• Have a procedure in place in case there is an escalation, sometimes customer can become angry with charges they had not anticipated

Technology Solutions for Accurate Billing

Below are some tools available that can help your shop make calibration billing easier.

Automated Time Tracking

To overcome challenges related to time tracking, your shop could employ:

• VIN-based tools that estimate calibration times
• Real-time labor tracking systems
• Integrated billing platforms, like QuickBooks

These strategies directly address all of the aforementioned challenges with time estimation. Revv is a tool that integrates VIN-lookup and VIN-decode to assist your shop with this exact issue. It can also auto-generate billing forms while integrating with other platforms like QuickBooks

Documentation Management

Specific methods to better organize your shop’s documentation, you could benefit from:

• Automated OEM requirement lookup
• Digital time log generation
• Customer communication templates

Luckily, Revv is also well-equipped and specifically designed to tackle these objectives, leaving you to do what you do best: calibrate with confidence.

Shop Management Integration

Your shop can also benefit from integrating with estimating and management platforms such as CCC, Mitchell, and QuickBooks.
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These can help you to automate your billing, and when paired with Revv, you can provide real-time pricing updates and enjoy seamless integration across all of them.

Maximizing ADAS Billing Success with Revv: Your Next Steps

The most successful collision shops are those that are taking advantage of the evolving world of ADAS. For you, that means taking full advantage and billing for any and all ADAS services that you provide. 

The goal is to choose which billing strategy makes the most sense for your shop. While this presents many challenges as we described above, simply ignoring the direction of the auto industry puts you behind the curve.

Revv ADAS is equipped to handle these exact challenges. Revv auto-generates invoices, integrates with CCC, Mitchell, and QuickBooks, and updates pricing in real time, saving shops $10,000 annually in administrative tasks.

Revv helps collision shops stay at the forefront of the aftermarket repair industry by streamlining ADAS calibration processes, including:

• Uncovering missed revenue opportunities 
• Providing VIN-based time estimation and OEM requirements
• Automated documentation and justification forms

We can help your shop simplify and streamline your strategies to ensure you are not missing out on any billable revenue by identifying all essential ADAS calibrations and helping you craft a billing strategy.

‍Book a demo today to see how Revv can dramatically enhance your shop’s billing experience and overall capabilities.