Automotive Services
Parts inventory tracking, labor efficiency monitoring, and insurance reconciliation for repair shops, body shops, car washes, and used car dealers.
The Industry
Automotive businesses run on two revenue streams that both need careful tracking. Parts markup determines one half of your profit margin. Labor billing determines the other half. Most shop owners price their work based on what the market will bear but never calculate whether they actually made money on that job after paying the technician and accounting for the parts that went into it. A repair that looked profitable on the invoice might have lost money once you factor in the comeback, the parts that got used but not charged, and the labor time that exceeded the estimate.
The complexity varies by business type. Body and collision shops deal with insurance companies that approve partial estimates, require supplements, and pay 45 days after the car leaves. Car washes process hundreds of cash and card transactions daily through equipment that needs constant maintenance. Tire dealers manage seasonal inventory swings and core charges that need tracking. Used car dealerships carry inventory financed through floor plan loans where interest accrues daily on every vehicle sitting on the lot. Towing companies juggle storage fees, lien sales, and payment timing that varies from immediate cash to 90-day insurance claims.
Who This Covers
Who This Covers
Auto repair shops, body and collision centers, car washes, detailing services, tire dealers, used car dealerships, and towing companies. Any automotive business in the Merrimack Valley or Greater Boston dealing with parts inventory, labor billing, or equipment-intensive operations.
What Makes It Complex
What Makes It Complex
Parts inventory with multiple suppliers and varying markup rates. Technician pay structures ranging from flat rate to hourly to commission. Insurance claim processing and supplement collection for collision work. Daily cash handling and reconciliation for car washes. Floor plan financing and carrying costs for dealer inventory. Core charges, warranty reimbursements, and sublet work that all need separate tracking.
What We Handle
Parts inventory tracking connects what you purchase to what gets billed on repair orders. This sounds basic but most shops expense parts when purchased and never reconcile to actual usage. We set up systems that track parts cost against parts revenue so you know your actual markup percentage by category. You might think you’re making 40% on parts but discover it’s actually 28% after accounting for warranty replacements, shop supplies used but not charged, and inventory that disappeared somewhere between the delivery truck and the customer invoice.
Body shops need insurance receivables tracked by claim with aging visibility. A supplement request submitted but never followed up is money left on the table. Car washes need daily cash counts reconciled to machine readings and card processor deposits. Used car dealers need floor plan interest tracked per vehicle so you know the true carrying cost when pricing units for sale. We handle payroll for shops with technicians on flat rate, hourly, or hybrid pay plans. Tax preparation accounts for equipment depreciation, vehicle expenses for tow trucks and service vehicles, and the specific deductions available to automotive businesses.
Parts and Labor Tracking
Parts and Labor Tracking
Parts inventory management connecting purchases to repair order billing. Cost of goods sold calculated accurately so you know actual parts margins. Labor efficiency metrics showing billed hours versus paid hours by technician. QuickBooks configured to track profitability by service type and identify which work actually makes money after all costs are allocated.
Business-Specific Accounting
Business-Specific Accounting
Insurance claim tracking and supplement follow-up for body shops. Daily cash reconciliation for car washes matching machine counts to bank deposits. Floor plan interest tracking for used car dealers showing true carrying cost per vehicle. Core charge and warranty reimbursement tracking. Payroll for various technician pay structures including flat rate calculations.
What Goes Wrong
Parts shrinkage happens in every shop. Some of it is theft. Some is parts used on employee vehicles without proper documentation. Some is warranty work where the old part got tossed before anyone submitted the claim. Without inventory controls, you have no way to know how much is walking out the door. Labor efficiency creates similar invisible losses. A technician on flat rate who bills 6 hours while being paid for 8 hours of clock time costs you money every day. Multiply that across a team and across a year and the number gets substantial. Most shop owners sense they’re not as profitable as they should be but can’t identify where the money is going.
Body shops write estimates, do the work, and then forget to follow up on supplements the insurance company never approved. The job is done, the car is gone, and $800 in additional labor never gets collected because nobody tracked it. Car washes counting cash once a week instead of daily allow small discrepancies to compound. Is the cash short because of theft, because a machine isn’t reading coins correctly, or because someone made a counting error? By the time you notice, the trail is cold. Used car dealers lose track of how long vehicles have been sitting. A car on the lot for 90 days has accumulated significant floor plan interest that eats into any profit when it finally sells.
Inventory and Labor Losses
Inventory and Labor Losses
Parts inventory never reconciled so shrinkage goes undetected for months. Warranty claims not submitted because the old parts were discarded. Labor efficiency below 100% that nobody measures or addresses. Technicians paid for hours that were never billed to customers. Shop supplies used on every job but charged on none of them.
Collections and Cash Problems
Collections and Cash Problems
Insurance supplements submitted but never followed up on. Body shop receivables aging past 60 days while the shop owner assumes insurance will pay eventually. Car wash cash counts that don’t match machine readings with no way to identify the source. Floor plan interest accumulating on slow-moving inventory without visibility into true carrying costs per vehicle.
What Changes
Parts margins become visible and protected. Monthly inventory reconciliation identifies shrinkage while the trail is still fresh enough to investigate. Labor efficiency gets measured by technician so you can address training needs or pay structure issues before they cost you another year of profits. You know which service types actually make money after allocating all costs. That brake job you’ve been pricing at $350 for years might need to be $395 to actually generate profit once you account for the parts, labor, shop supplies, and equipment wear.
Body shop insurance receivables get aged and followed up on systematically. Supplements don’t slip through the cracks. Car wash cash gets reconciled daily so discrepancies get caught while they’re small and identifiable. Used car dealers see floor plan costs per vehicle so pricing decisions account for carrying costs. Monthly financials show actual performance instead of numbers distorted by inventory timing or receivables that may never collect. Tax returns prepared by someone who understands automotive operations and captures equipment depreciation, vehicle expenses, and industry-specific deductions.
Operational Visibility
Operational Visibility
Parts margins tracked and protected through regular inventory reconciliation. Labor efficiency measured and improved through visibility into billed versus paid hours. Profitability clear by service type so pricing decisions are based on actual costs not assumptions. Shop owners running the business with real numbers instead of hoping things work out.
Financial Control
Financial Control
Insurance receivables collected through systematic follow-up before they age into losses. Cash fully accounted for with daily reconciliation catching problems early. Floor plan costs visible and factored into used car pricing. Clean monthly financials showing actual business performance. Tax preparation maximizing deductions for equipment, vehicles, and operational expenses.
The Merrimack Valley's Trusted Accounting Partner
The Next Step:
A 15-Minute Call
Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a straightforward quote.