With the buzz-phrase "electronic commerce" and the Internet on the tip of most news reporters' tongues, it was only a matter of time before the auto body repair shop would be invaded by a computerized method of getting paid. Direct repair programs (DRPs), whether you like them or not, are becoming more of an industry norm every year. Thus, to expedite direct claims, repair facilities and insurance companies are commonly using electronic claims processing.

Electronic claims processing is the use of a computer to organize, send and receive damage and repair information. This method of processing claims is faster and often more organized and consistent from one claim to the next. Using electronic claims processing, information in a repair estimate or claim data can be edited directly and then sent by computer from one office to another within the insurance company, or to and from the repair facility. This keeps shops and claims adjusters from having to fax and rewrite estimates and supplements. It also helps ensure accurate communication of the facts of a loss between the shop and insurer, not to mention it helps the shop get paid. And isn't that what this is all about?

Electronic claims processing can be a complex issue for a repair shop. There are numerous software companies whose offerings allow shops to communicate with insurers and fleet companies, and most incorporate electronic estimating and digital imaging as well. These software packages allow claim assignments to be sent to the shop from the insurer by way of a computer network. When the shop receives the assignment, it adds additional customer information, an estimate and in some cases digital photographs of the damage, and the shop then sends the information back to the insurer by way of the computer network. Pop-ular examples of such software include ADP's Shoplink, Mitchell's UltraMate and CCC's Pathways. Each software maker's product requires specific computer equipment, but basically each shop would need a computer running Microsoft Windows, a printer and a modem to allow your computer to "talk" to other computers over phone lines.

The greatest issue when evaluating which vendor's software to use would be compatibility. That is, what insurance companies will the software "talk to"? Each company's software is largely proprietary, which means that an estimate written with ADP's Shoplink can not be used on a computer running CCC's Pathways. In spite of the Collision Industry Electronic Commerce Association's (CIECA's) attempts to standardize automotive claims electronic processing, this is likely to remain a problem for repair facilities for some time.

Depending on the insurance companies you intend to do business with electronically, they probably will require a specific vendor's software. For instance, Bagpipe Player's Mutual may require ADP's Shoplink system to communicate claims electronically, while Sunbelt Shareholder Insurance may only work with Mitchell's UltraMate. State Farm's Service First Program is an exception to this rule, as they support all three major software packages.* You will need to carefully weigh which insurers you want to be able to communicate with when deciding which software to purchase. You may even decide to subscribe to more than one software.

Other things to consider when selecting your software include the software's features. What can the software do? All popular packages allow for estimating and customer information organization. Some software packages will also allow you to track parts orders and fax parts purchase orders to your suppliers, some (often for an additional fee) allow you to send the aforementioned digital photographs, which more insurers are requiring. And some software packages offer scheduling features to help you schedule customers' appointments and pick-up times. You just need to decide what you expect the software to do for you now and in the near future.

Another factor is cost. Most software is purchased by paying a setup fee and then a monthly subscription to get estimating database updates and the ability to access the vendor's communications network for sending and receiving data and technical support. Remember that what you pay up-front and what you pay each month may vary widely from one vendor to another, so consider the total cost of ownership, not just the down payment or monthly fees alone.

Also, make sure you can stick with your decision for several years, particularly if you must sign a subscription contract. You wouldn't want to be stuck paying for software that no insurance company communicates with or that none of your employees can stand to use.

In the real world, electronic claims processing can be confusing, but for the most part it has been a great help to our shop's DRP efforts. With the help of a computer whiz (maybe your neighbor's kid?), getting the software and computer equipment you need and getting them ready to use is relatively easy.

If the insurer you plan to communicate with is just getting started in electronic commerce as well, expect some glitches. To ease your worries, most major software vendors include the installation and setup of the software in the purchase price. So all a shop really has to worry about is learning to use the software, which is no more difficult than most other computer applications you could pick up at a local computer store.

Our shop has had much success with electronic DRPs. We have direct control of how estimates are written on the vehicles we repair, and we are paid on time and to the penny. We have found that the initial time and money invested have paid off!

Of course, there can be some drawbacks. The most obvious and immediate are the costs involved in getting started, especially if you don't already have computer equipment. Expect expenses other than just the computer, such as an extra dedicated phone line for the modem. Many insurance companies will also review the estimates you transmit to them electronically and "grade" you by their own in-house estimating guidelines, which can be disconcerting. There is also the fact that your repair shop will probably be expected to keep a great deal of hard copies and computer data records of the claims that you process.

As I mentioned before, the electronic claims process has proven to be profitable for our shop, and may be for yours as well, if all things are carefully considered. In the near future, as computers take a more prevalent role in the day-to-day business of body repair, it can be expected that still better forms of electronic commerce will be brought forth to our industry. Although the technology is in its infancy, particularly in the automotive field, it is still a worthwhile prospect for acquiring new business and speeding some of the insurance work through your office.

*State Farm currently accepts CCC's EZest, but Pathways was still under evaluation at the time of this writing.

Patrick Paul is the office manager of ASA member Mell Paul's Body Shop in Norcross, Ga., and a former computer and digital imaging consultant. He holds a degree in management and is an ASE-certified estimator.

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