Billing a repair to the insurer and the excess to the owner
How a panel shop or workshop invoices an insurer or warranty provider for a repair and the owner for the excess, then follows up both balances.
By Achekam · · 4 min read · For Automotive businesses in South Africa, Nigeria, Kenya
After an accident, the repair is authorised by the insurer, but the car belongs to someone else. The owner wants it back. The insurer's assessor approved a quote, and the insurer will pay once the claim is processed. The owner owes the excess, and perhaps the cost of extras the policy does not cover. A warranty or service-plan repair works the same way: the plan provider pays most of it, the owner pays what the plan excludes.
One repair, two debtors, paying at different speeds. A panel shop that bills it as one invoice ends up chasing an amount that nobody owes in full. This article shows how to split the bill, release the vehicle cleanly and follow up insurers until they pay.
Who owes what on an insured or warranty repair
Settle the split before the vehicle leaves:
| Part of the bill | Who usually pays | What sets the amount |
|---|---|---|
| Authorised repair, less the excess | The insurer | The assessor's authorisation |
| The excess | The vehicle owner | The owner's policy schedule |
| Extras, betterment or work outside the claim | The vehicle owner | Your quote, agreed with the owner |
| Covered warranty or plan work | The warranty or plan provider | The provider's authorisation |
Get the insurer's authorisation in writing, with the claim number and the authorised amount, and keep it with the job. If the assessor changes the authorised amount during the repair, file the revised authorisation as well.
In South Africa, how insurers allocate repair work and appoint motor-body repairers is the subject of the Competition Commission's guidelines for the automotive aftermarket, which also cover in-warranty servicing and repairs by independent workshops. It is worth reading if you depend on insurer work.
Two invoices: the insurer's share and the owner's excess
Raise two customer invoices for the job:
- To the insurer, for the authorised repair less the excess, quoting the claim number, the owner's name and the vehicle's registration.
- To the owner, for the excess and any agreed extras.
Create each one as a draft first, check it against the authorisation, and then issue it. Issuing takes the next number in your sequence and posts debtors, sales and output VAT. An issued invoice can be downloaded as a PDF on your letterhead and e-mailed straight from the invoice, with or without a pay link, and a failed send is reported as not sent, so you know whether the insurer's claims inbox actually received it.
How VAT applies to the excess and to the insurer's share is a question for your accountant; settle it once and apply it to every insured job.
The insurer's tax number on its invoice
Insurers usually insist that their tax number appears on your invoice. Enter it on the insurer's customer record. On documents, Achekam prints a customer's tax number as a VAT number only when it looks like a South African VAT number; otherwise it prints as a tax number. A Nigerian or Kenyan insurer's number will therefore show as a tax number, which is what you want.
Releasing the vehicle once the excess is paid
Make payment of the excess the condition for handing over the keys. When the owner pays, record the payment against their invoice. If they pay only part, the invoice stays part-paid and the balance is plain to see.
Most owners pay by card or transfer at collection. For transfers at the desk, bank transfers at the service counter explains how to confirm the money has arrived before releasing the car.
Following up insurers and plan providers by statement
Insurers pay in batches, and one remittance often covers many claims. Two tools help:
- The age analysis. Receivables are aged into 0-30, 31-60, 61-90, 91-120 and over 120 days, with overdue totals. Read it at each month end with the insurers in mind, and the claims that are slipping stand out.
- The statement of account. The server produces a customer statement as a PDF that can be e-mailed, and the screen says whether it was sent. Send each insurer's claims department a statement every month; it lists every open claim invoice in one place.
When a remittance arrives, allocate it across the insurer's invoices claim by claim, using the claim numbers on their advice. If documents for a claim are still missing, sending claim documents through a secure link shows how brokers move them safely.
When an insurer pays less than the invoice
Short payments happen: a part is priced lower by the assessor, labour hours are cut, or betterment is applied late. Work through it like this:
- Record what was paid. The invoice stays part-paid.
- Ask the insurer for the reason in writing.
- If you accept the reduction, issue a credit note from that invoice for the lines or amount conceded. A credit note is always issued from the invoice it corrects.
- If the shortfall is the owner's responsibility under the policy, invoice the owner for it separately.
- If it will not be recovered from anyone, an unpaid debt can be written off once a partner approves.
Keep the reason with the job, because the next claim from the same insurer will likely meet the same assessor's rule.
Making it routine
Set up each insurer you work with as a customer with its tax number and claims e-mail address, and agree inside the workshop who raises the two invoices on every insured job. Parts used on the repair raise a separate stock question, covered in parts on workshop invoices.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
