Paying for Repairs on Equipment Still Under Warranty — A Preventable Cost
Published: April 14, 2026
The air conditioning plant on the third floor stops working on a Monday morning. The maintenance supervisor calls the vendor. A technician arrives, diagnoses a compressor failure, replaces the part, and submits an invoice for Rs 1.8 lakhs. The invoice is processed, matched against a service PO, and paid within the week.
Three weeks later, during a routine vendor ledger review, someone notices that this particular AC unit was purchased eighteen months ago with a two-year comprehensive warranty. The repair should have been covered at no cost. The Rs 1.8 lakhs was an entirely preventable expense.
This is not an edge case. Research shows that companies lose up to 35% of potential warranty savings — more than a third of repairs that could have been claimed under warranty are instead paid for out of pocket. The problem is compounded when AMC contracts expire without anyone noticing, leaving equipment unprotected during the period when breakdowns are most likely.
1. What Happened — Two Common Scenarios
1.1 Paid for Repair During Active Warranty
The maintenance team knows the equipment is broken. They call the vendor they normally work with — or a third-party service provider — and get it fixed. Nobody checks whether the equipment is still under warranty because the warranty information is not accessible at the point of decision. It exists somewhere — perhaps in the purchase file, perhaps in a shared folder, perhaps in someone's email — but not where the maintenance supervisor can see it when the equipment fails at 9 AM on a Monday.
1.2 AMC Expired Without Renewal
The original warranty expired twelve months ago. The organisation entered into an AMC with the vendor. The AMC expired three months ago. Nobody noticed. Nobody was tracking the expiry date. Now the equipment breaks down, and the single repair costs more than the annual AMC premium would have been. Worse, the vendor knows the AMC has lapsed and quotes a higher rate for one-off repairs.
Both scenarios have the same root cause: warranty and AMC dates are not linked to the asset record in a way that is visible and actionable.
2. Why It Happened — The Tracking Gap
2.1 Contract Dates in Excel — or Nowhere
The most common "system" for warranty tracking is a spreadsheet maintained by the admin or accounts department. It is populated at the time of purchase — if someone remembers — and never updated. Within months, it is incomplete and out of date. The maintenance team doesn't know it exists. The admin team doesn't know an asset needs repair until the invoice arrives.
2.2 No Link Between Asset Register and Contracts
Even organisations that maintain a fixed asset register often keep warranty and AMC data separately. The register tracks the asset's financial attributes — cost, depreciation, book value — but not its contractual coverage. When the maintenance team looks up an asset (if they can look it up at all), they see financial data but not whether it is under warranty.
2.3 No Alerts Before Expiry
An AMC expiring is not an event that announces itself. If nobody is tracking the date, nobody gets a warning. The contract quietly lapses. The equipment continues to function — until it doesn't. By the time the breakdown triggers a review, the renewal window has passed and the vendor may require a fresh inspection before agreeing to a new AMC, adding both cost and delay.
2.4 Maintenance Team Disconnected from Procurement
The person who handles the breakdown (maintenance supervisor) and the person who has access to procurement records (purchase officer) are different people in different departments. Without a shared system, the maintenance supervisor's decision to call a vendor and authorise repair is made without visibility into the purchase history or contractual coverage of the equipment.
3. What to Do Now — Immediate Steps
3.1 Audit Active Warranties and AMCs
Pull all purchase orders for the last three to five years. Extract warranty terms from PO line items and vendor correspondence. Map these against the current asset register. Identify every asset that currently has active warranty or AMC coverage — and every asset where coverage has recently expired.
3.2 Identify Repair Costs During Active Coverage
Cross-reference repair invoices from the last two years against assets that were under warranty or AMC at the time of repair. This reveals the total amount paid for repairs that should have been covered. For active warranties, submit retrospective claims to the vendor with the original warranty terms and the repair invoices.
3.3 Negotiate Bulk AMC Renewal
For assets with expired AMCs, negotiate renewal in bulk rather than one at a time. Vendors typically offer better rates for portfolio-level AMCs. Group assets by vendor, by equipment type, and by location to create renewal packages that make commercial sense.
3.4 Establish Renewal Calendar
For every active AMC, note the expiry date and set a review trigger 60-90 days before expiry. This gives enough time to evaluate whether renewal is worthwhile, negotiate terms, and process the renewal before the gap in coverage appears. The 60-90 day buffer matters because the renewal PO itself often gets stuck in the approval chain — by the time it clears, you have already burned through a month or more of the buffer.
4. How to Prevent Recurrence — Structural Controls
4.1 Capture Contract Dates at GRN
The right moment to capture warranty data is when the asset enters the organisation — at the goods receipt stage. The warranty start date, end date, and coverage terms flow from the PO into the GRN and from there into the asset register. This eliminates the "someone forgot to update the spreadsheet" failure mode.
4.2 Expiry Monitoring with Look-Ahead
The asset management system should surface contracts approaching expiry — not just those that have already expired. A configurable look-ahead (30, 60, 90 days) shows which warranties and AMCs will expire soon, grouped by department, vendor, or classification. This is the difference between reactive (discovering the gap after a breakdown) and proactive (renewing before the gap appears).
4.3 Vendor Compliance with Urgency Bands
The vendor compliance report groups contract expiries into urgency bands — RED (expired or expiring within 30 days), ORANGE (expiring within 60 days), GOLD (expiring within 90 days). This visual prioritisation ensures that the most urgent renewals are handled first.
4.4 Expiry Reports by Department
Department heads should receive periodic reports showing which assets in their department have warranty or AMC coverage expiring. This distributes the monitoring responsibility — the admin team manages the overall renewal calendar, but the department head knows which of their critical equipment is about to lose coverage.
The cost of not tracking warranty and AMC dates is invisible until a breakdown happens. Then it becomes concrete and measurable — the repair invoice that should have been zero. Across an organisation with hundreds of assets, these invisible costs accumulate into amounts that would have justified a proper tracking system several times over.
5. Frequently Asked Questions
How much do companies lose from missed warranty claims?
Research indicates that companies lose up to 35% of potential warranty savings — more than a third of repairs that could have been covered under warranty are paid for out of pocket. This happens because the maintenance team does not check warranty status before calling a vendor, because warranty dates are tracked in a spreadsheet that nobody updates, or because warranty information is not linked to the asset record. For organisations with hundreds of assets, these missed claims accumulate into significant amounts.
Should AMC be renewed or is it better to pay per repair?
This depends on the asset's age, criticality, and repair history. For critical equipment with breakdown history, AMC is almost always more economical — a single major repair can cost several times the annual premium. For non-critical equipment that rarely breaks down, pay-per-repair may suffice. The problem is that most organisations lack the repair cost history to make this decision with data. A structured asset register linking contracts and repair costs to individual assets provides the evidence needed for rational decision-making.
How do you track warranty across hundreds of assets?
Warranty dates must be captured at the point of receipt — when the GRN is posted. At that moment, warranty start date, end date, and coverage terms are known from the PO or vendor documentation. If this data enters a structured system linked to the asset register, every asset automatically has its warranty period recorded. Expiry reports can then be generated by department, classification, vendor, or date range. Tracking in Excel fails because nobody updates it after initial entry.
What data is needed from the GRN for warranty tracking?
At minimum: warranty start date (typically the delivery or commissioning date), warranty end date, and the vendor who provides the warranty. For AMC contracts: contract start date, end date, renewal date, vendor, and coverage scope (comprehensive or non-comprehensive). This data should be captured when the goods receipt is posted, because that is when the warranty clock starts. The GRN is the natural collection point because it represents the moment the asset physically enters the organisation.
Can warranty and AMC dates be bulk imported for existing assets?
Yes. For organisations with existing assets but without contract dates in the register, bulk import is the practical approach. Export the current register, add warranty and AMC columns, populate from vendor records and purchase files, and import back. This is a one-time effort. For new assets going forward, the data is captured at GRN and flows automatically. The initial import typically takes one to two weeks depending on asset count and availability of vendor records.