Offset & Offsetting

Communications offset. The time it takes for a business to notify the client or customer of a problem. The offset can be in minutes, 3 min: hours, 3h,: days, 2d,: months,  4 mos., or no communication at all, NC.Take for an example,  an insurance agent who is notified by an insurance carrier that a policy is to be cancelled for non payment. The company has fifteen employees and traffics in a high volume of policies. The policy in question only pays the company a few hundred dollars, not much for a company of this size.  The larger the company gets the greater its focus on money vs. service increases. This means in our example, the communication to the client is delayed or not delivered at all, causing a cancellation of the policy. The cance3llatioon goes on the clients record and they must pay more for the policy in the future even though they had in fact paid on time.

Another form of offset is the response delay. The responsiveness of service provider to the needs of their customers rated in minutes, hours, days or even months.

A communication offset for an auto shop might be two days in practice. But, their delivery offset might be a month for a transmission repair but their delivery offset might be two months. Standards in the industry for the same repair might reasonably be one week. Their is a cost to the customer for the delay and the frustration of listing to the business excusing itself for such a relatively minor repair. Where there is a large offset they is more likely to be lying and deception from a mismanaged business that knowingly overbooks repair jobs.

Valuation Offset

  The difference between the apparent value of merchandise and its actual cash value. Here something cheap is substituted for something of value. This extends to services that are offered to the public. For example, you might see an advertisement for a brake job for $79. So, the installation of brake shoes and pads is $79. This appears to be a great value since brake jobs often exceed $200. What the auto repair shop does not tell the customer is that most cars with more than ten thousand mile on the brakes also need to have the brake drums and rotors machined. A good percentage of rotors that need machining are too worn and they must be replaced with new ones. Each rotor cost about $100, but the repair shop pays only $50 wholesale. Many times they aggressively mark up the price another 50% because you car is torn apart and you are virtually forced to go through with the job. Moreover, there is an increased cost of the labor maximizing the profits of the shop. Here the valuation offset is very high because the customer might end up paying $750 for a job that a high priced, dealership might have paid. While the auto dealership is high priced it is also likely to be done with highly skilled repairmen using factory original, high quality parts. So, the is no value evident in the $79 brake job but there is value in the work of many other repair shops and the dealership. The valuation offset be a zero as opposed to an in dependant shop using high quality parts and employing well trained mechanics valuation rating of ten.

Offsetting

  Part of a billing practice where the business balances extra work done with extra work performed. For example, a lawyer quoted that incorporation of a business would be four thousand dollars. He represented the work as being difficult and therefore more expensive than usual. As it turned out the paperwork took half the time, and was easy to do. But, the client keeps calling the attorney, asking advice here and there on unrelated matters.

It is important to know both the communication offset and the completion offset to fully evaluate the ethical framework a business is operating in. The lawyer with an obsession with moral details would estimate the extras in his mind, assign a price, and deduct it from a seventeen hundred dollar overage from the incorporation refunding, say four hundred dealers to the client. This is not to say the lawyer has an ethical obligation to give monetary consideration on easy jobs, rather to say there are people who do and so set a high standard of business conduct.